Medicaid spending plans challenged by NC Senate
RALEIGH — North Carolina senators were not persuaded Thursday to accept Medicaid spending numbers for the coming year from Gov. Pat McCrory's administration after hearing a two-hour presentation led by State Budget Director Art Pope.
Pope was summoned by the Senate Appropriations Committee to explain why McCrory's spending projection earmarks are much less than the Senate's to pay for unpaid claims from the year ending June 30 and additional enrollment and services for next year.
The House — which largely sides with the governor's position — and the Senate are about $250 million apart in their rival proposals on additional spending for Medicaid, the federal-state health insurance program for 1.6 million North Carolina residents.
After the meeting, Senate leader Phil Berger said questions remain, particularly on how much it will cost to pay for more Medicaid applicants — those who come through the federal health care overhaul and others pending at county social service offices. The state set aside nearly $3.5 billion for Medicaid this year.
Berger, R-Rockingham, said he's worried the state will find itself with another Medicaid shortfall running hundreds of millions of dollars, taking money from other priorities. The legislature had to find $375 million at the close of the 2011-12 fiscal year and $487 million in 2012-13. Berger said senators won't start negotiating in earnest with the House on budget adjustments for the new year that starts Tuesday until they feel more comfortable with numbers showing what's needed to avoid another shortfall.
"We need to know that we have enough money to fund teacher raises. We need to know we have the dollars to fund the other things that we have in state government," Berger told reporters. He said lawmakers will take the time necessary to make sure.
The negotiation delays prompted House Republicans later Thursday to pass a scaled down plan to adjust the second year of the state budget without addressing dozens of differences with the Senate in other agencies.
Pope said there will be a positive cash balance of $70 million this fiscal year to carry forward to pay Medicaid providers whose current invoices are still pending within the state's new billing system.
"There is good news," Pope said, but he acknowledged "there are still many uncertainties." Lawmakers peppered Pope and his staff Thursday for better calculations of unpaid claims reimbursements for hospitals.
Accepting the Senate's worst-case scenario on Medicaid isn't prudent, Pope said, and would force needless cuts in education and health care that could mean educators lose jobs or other Medicaid services are cut. The Senate budget reduced funding for teacher assistants by $233 million.
"What is the cost of overfunding Medicaid? The cost in the Senate budget is firing teacher assistants," Pope said. Senators took issue with Pope's comments, saying they believe they can avoid the most difficult spending cuts while remaining cautious with Medicaid.
"We're not negotiating the budget," Sen. Harry Brown, R-Onslow and the committee's co-chairman, told Pope. "What we're trying to negotiate is the starting point to begin a budget process."
The House showed rare bipartisanship by voting unanimously Thursday for the GOP's slimmed budget bill. Minority Leader Larry Hall, D-Durham, said the measure showed "incremental progress" toward finding a long-term solution for teacher pay but said it was still a Band-Aid.
Hall's comments stirred House Speaker Thom Tillis, R-Mecklenburg, to leave the dais and speak in favor of the plan, saying it will fulfill the promise of raising teacher salaries made months ago.
The measure, anchored by average 5 percent pay raises for teachers and flat $1,000 raises for most state employees, is also backed by McCrory. It's viewed as leverage to negotiate with the Senate. But senators seem likely to ignore it, pointing to their own proposal to raise teacher salaries by 11 percent on average. Teachers, however, would have to give up job protections for a salary increase.