Final budget plan maintains county lottery funds at $100M; excludes NEMT proposal | Eastern North Carolina Now

Press Release:

    The General Assembly released its conference report on the 2015 state budget late Wednesday night, with appropriations and special provisions largely favorable to counties. The budget includes $100 million in lottery funds for county school construction needs, maintaining the appropriation at current levels. Although counties sought restoring lottery funds to the original 40% of net lottery proceeds, given the scarcity of state resources and the commitment to teacher salary increases, county-focused advocacy on lottery funding helped keep these dollars in place. The conference report accepts the House's special provision to prohibit county lottery funds from being pledged officially for debt services, but does not exclude debt service as one of the uses of school construction lottery dollars. New lottery language eliminates the Lottery Oversight Committee while setting up a Joint Legislative Lottery Oversight Committee.

    The budget provides roughly $14 million in state-funded enhancements to county child welfare services and excludes the House proposal to contract out non-emergency Medicaid transportation—huge wins for counties. Also excluded, and again, beneficial to counties, were earlier recommendations for school workers' compensation and tort claims costs to be shifted to local agencies, proposed increases in the county share of forestry services, and restrictions of state-funded school nurses to Tier 1 school districts.

    With a session focus on teacher salary increases, the final compromise includes an average 7% increase for all teachers. The budget increases teacher beginning pay to $33,000, and restructures the teacher salary schedule from 37 steps to 6, with $50,000 for 25+ years of service. All non-certified school employees, including central office staff, would receive a $500 raise. The budget keeps teachers' assistants largely intact, although the TA allotment is reduced to reflect actual local spending practices.

    State and community college employees would receive a recurring $1,000 salary increase and 5 additional days of vacation, with state retirees receiving a 1% COLA.

    The conference report accepts Senate and House plans to phase out the $500,000 net Medicaid Relief Swap benefit to counties. This benefit, not the hold harmless itself, would be phased out by $125,000 each year over four years. The 21 counties who gave up more in sales taxes than they have received in Medicaid relief would still be held whole.

    All state misdemeanants, including DWI offenders, would be housed in county jails through the voluntary Statewide Misdemeanant Confinement Fund program. SMCP was created in 2011 as a part of the Justice Reinvestment Act to lower state prison populations and increase community probation oversight. The JRA increased court fees in order to establish a fund managed by the N.C. Sheriffs' Association to reimburse counties that voluntarily agree to accept state prisoners within available jail bed capacity. Several state prisons would close or be repurposed to reflect lower state prison populations. SBI would transfer to the Dept. of Public Safety, but the state's crime lab will remain in Justice.

    Medicaid reform would be put on hold until the General Assembly reconvenes November 17th. As our readers may recall, the Senate's most recent proposal would blend accountable care organizations (voluntary network of providers) with managed care organizations while the House supports an ACO network of care. The budget compromise largely maintains current Medicaid clients and services, but a special provision limits access to the Medicaid cost-overrun reserve fund until NC-DHHS submits for federal approval a plan to decouple Medicaid eligibility from state/county special assistance. The budget also tightens state/county special assistance for new clients going forward. Additional Medicaid provider rate cuts are included, as is a restructuring of some Medicaid payment and assessment schedules.

    Most state agencies would see small cuts in their continuation budgets—DPI would be cut 10%. These funds, additional Medicaid payment cuts, and retention of reserve fund transfers provide resources for teacher and state employee increases and other expansion items.

    The Senate votes Thursday and Friday to conclude its budget consideration—House rules prevent House consideration until Friday, with a final vote expected on Saturday. Thereafter, the General Assembly is likely to adjourn until August 14 to consider any possible gubernatorial vetoes and any conference reports with named conference committees.

    Contact:

     - Johanna Reese, Government Relations Director

     - David F. Thompson, Executive Director