By Rose Hoban
In rolling out his first budget, Gov. Roy Cooper said he will be able to increase North Carolina’s spending for the coming fiscal year by $1.1 billion.
Cooper’s $23.48 billion dollar spending plan for 2017-18 emphasizes increasing teacher pay, increasing salaries for state employees across the board and builds on former Gov. McCrory’s infrastructure improvements to upgrade more state properties.
Cooper said he could do all he wanted “without raising taxes, without raising fees, without cutting services and without dipping into special funds.” He also said he looked forward to working with the legislature on the budget.
But Cooper is sure to hit resistance in the General Assembly, where he’s been deadlocked over his cabinet nominations and Medicaid expansion since taking office in January.
In a tweet, Senate leader Phil Berger called Cooper’s 5.5 percent increase from last year’s budget “reckless.”
At a press conference to present his budget held at Durham Tech Community College Wednesday, Cooper defended the increase by pointing to the state’s nearly half billion dollar revenue surplus and said it was time to invest, including an increase of $58 million over last year’s health and human services budget.
And the governor said he still thinks it’s a good idea for North Carolina to expand the Medicaid program, something he said could be done without spending any state dollars. He plans on having hospitals pick up the tab for any administrative fees and for the 5 percent of the cost of the care for as many as 624,000 new beneficiaries.
“I have talked to hospital CEOs. I think they are willing and ready and able to step up in exchange for this expansion,” he said. “It’s gonna be a net gain for them. They’re getting hundreds of millions of dollars in this expansion.”
Medicaid expansion stuck in neutral
Cooper and Republican leaders in the General Assembly remain at loggerheads over the expansion of Medicaid that has been allowed for under Pres. Barack Obama’s signature health care law. Initially, states that expanded Medicaid were able to have the entire tab for expansion covered by the federal government for three years. North Carolina has missed that opportunity, but if the state expanded, the federal government would pick up 95 percent of the cost in 2017, 94 percent in 2018 and 93 percent in 2019 and 90 percent thereafter.
Governors in 16 states currently run by Republicans chose to expand, including Vice President Mike Pence when he was governor of Indiana and former presidential candidate John Kasich of Ohio, where the expansion has been declared ‘beneficial.’
“Republican governors all over this country have decided this is a fiscal issue,” Cooper said. “They were able to work deals that would help their states, they were able to work deals where they could put in requirements for work.
“I’m willing to do all those things.”
Cooper made a gambit to expand Medicaid, something that’s been strenuously opposed by the legislature, in the first days of his governorship, with the goal of fast-tracking a decision in the waning days of the Obama administration.
But a federal judge put a stay on Cooper’s request and the proposal remains in legislative and judicial limbo.
Last month, a tracking poll conducted by the Kaiser Family Foundation found 84 percent of people nationwide felt it was “very” or “somewhat” important to continue federal funding for the Medicaid expansion, that included 69 percent of Republicans.
“This is an important issue,” said Carla Obiol, head of the health care advocacy coalition, Care4Carolina. “We look forward to discussing a solution for North Carolina with our state lawmakers and the governor.”
Cody Hand, from the North Carolina Hospital Association, was more guarded.
“North Carolina hospitals and health systems stand ready to work with the Governor, our legislature and our members of Congress to develop and implement workable solutions,” he wrote. “We appreciate the Governor’s commitment to protecting the overall physical and mental health of North Carolinians.”
More than lollipops
After two scathing reviews of North Carolina’s child welfare system in 2016, Cooper makes significant investment in the system, including $18.7 million for case management and service improvements.
But the child welfare headline in Cooper’s budget is his appropriations to make the NC Pre-K program and Smart Start services available to more children.
“The early education package… is the strongest investment in over 10 years in this area,” said Cooper’s budget director Charlie Perusse. The money would provide for almost 4,800 additional Pre-K slots, and would almost completely eliminate the waiting list for the service by the end of the biennium.
The Smart Start program would also get a significant boost of $15 million, “that’s a 10 percent increase, the largest Smart Start has seen since 2007-08,” Perusse said.
Mental health gets consideration
For the past two fiscal years, budget writers at the legislature have pulled back funds provided to the state’s local mental health agencies (known as LME-MCOs) because lawmakers said the agencies were not spending enough state dollars to provide community-based services. Last year’s “clawback” of the fund balances came to a total of $152 million, and LME-MCOs were bracing for a similar clawback this year.
“Shortly after the governor took over, we sent a lengthy letter to him with our priorities in there and asked for consideration,” said Mary Hooper, head of the North Carolina Council of Community Programs, an umbrella group that represents the LME-MCOs.
Hooper said she was pleased Cooper’s budget would restore those dollars; he also earmarked $47 million that the LME-MCOs must spend on services. (see box below)
Key program (subsidies to encourage developers to build housing for people with disabilities)
1,000 additional slots for enhanced “Innovations” services for people with intellectual/developmental disabilities
Funds to provide for more Innovations waiver services for people with I/DD who have lower-acuity
Funds to aid in the Transitions to Community Living program for people with I/DD living in adult care homes
Lawsuit settlement funds for treatment of children with complex needs
Payments to community hospitals with so-called “three-way beds” to provide mental health inpatient services
Funding to provide services to address the opioid/ overdose crisis that include medication, family and group support services
Last fall, LME-MCO head Richard Topping from Kannapolis-based Cardinal Innovations came under blistering criticism from legislators who expressed outrage at Topping’s high salary. Hooper took pains to note the fund balances used by other LME-MCOs are funding projects and facilities, not administrative overhead or salaries.
When asked if she worried that other LME-MCOs might be targeted for cuts because of the Topping controversy, she responded, “I can see how you can imagine that.”