The budget should be wrapped up by July 1, in time for the new fiscal year’s start.

By Rose Hoban

With just two more votes to go in the House of Representatives, this year’s $22.3 billion budget is well on its way to becoming North Carolina law in time for the start of the next fiscal year Friday.

This year’s Health and Human Services budget lacks some of the pain of previous years, and for the first time in years many legislators’ pet projects received funding. That’s in large part because the state’s Medicaid program came in with more than $300 million in surplus dollars, after being given a generous cushion in last year’s spending plan.

“For the first time in a long time, this may not be the major focus of the budget in the Senate,” said Sen. Ralph Hise (R-Spruce Pine) as he presented the Health and Human Services budget on the Senate floor.

“I’m excited to come here and not be talking about the massive hole caused by Medicaid,” said Hise, who is the appropriations chair in the Senate for Health and Human Services.

Rep. Donny Lambeth (R-Winston-Salem) Image courtesy of the NC General Assembly website
Rep. Donny Lambeth (R-Winston-Salem) Image courtesy of the NC General Assembly website

And some late dollars flowing back to state coffers from departments that had money left over gave lawmakers a little more to play with, said Rep. Donny Lambeth (R-Winston-Salem), who is Hise’s counterpart in the House.

“We ended up having $62 million more of reversions that went into availability as recently as last Thursday,” Lambeth said. “We’re getting closer to June 30 and the departments knew that they were going to be returning more money back in [to the state General Fund]. So that came in through the budget office and literally we found out about it on Thursday as we were wrapping things up.”

Lambeth said that allowed lawmakers to fund some of the requests that would not have otherwise seen the light of day.

“I don’t know that you’ll see it again in the next five years,” Lambeth said. “It was very unusual.”

Small is beautiful

Among those special requests was an initiative to provide $250,000 small grants to convenience stores located in food deserts, areas without other grocery store options, to buy refrigerators and shelving in order to carry fresh fruits and vegetables.

“This is big for obesity prevention,” said Betsy Vetter, from the American Heart Association, who had been pushing legislators for as much as $1 million for the initiative. “We haven’t gotten anything in a bunch of years, it’s a good start.”

The budget also had a bevy of small allocations, from $50,000 for a program to take disabled military servicemembers and veterans fly fishing, to $100,000 for community-based sickle cell centers, and $250,000 to do asbestos abatement at the old Davis Hospital site in Iredell County.

These “pages of pet projects,” drew fire from Sen. Erica Smith-Ingram and other Democrats as they debated the budget his week.

But some of the special projects will have a very long legacy, such as $8 million in funding for an Asheville-based facility for the UNC School of Medicine designed to get more medical residents living, learning and remaining in rural communities.

“If you live in western North Carolina and feel you can vote against this budget you need to go home and do some ‘splainin’,” Sen Tom Apodaca (R-Hendersonville) said during the Senate budget debate.

Recurring mental health dollars

Advocates in the mental health community had good and bad news.

The bad news is that the budget keeps in place a clawbacks of funds that had been paid out to the state’s mental health managed care organizations as part of their reserve. Lawmakers were frustrated that the agencies were hanging onto to too much of their state-funded reserves without creating new services and programs.

The LME/MCOs, as they’re known, had $110 million reclaimed last year, but because Medicaid came in under budget, they were able to get back $30 million of that this year.

The plan is for the state to reclaim $152 million from the fund balances in this year’s budget, too. But If Medicaid comes in under budget again next year, the LME/MCOs will get back another $30 million of that money.

“They’ve had a very good year, they actually built on their reserves this year,” Lambeth said.

“The commitment I made with the LME/MCOs and our senate colleagues is to actually to be prepared for the long session to look at their fund balances, their obligations and see where we are at that point.” he said.

Sen. Tamara Barringer speaks to the Governor's Task Force on Mental Health and Substance Abuse on Tuesday, while TKTK Beale from the NC Board of County Commissioners looks on. Photo credit: Rose Hoban
Sen. Tamara Barringer speaks to the Governor’s Task Force on Mental Health and Substance Abuse in January, while Ronnie Beale from the NC Board of County Commissioners looks on. Photo credit: Rose Hoban

The good news in the mental health budget is the allocation of $10 million in recurring dollars to fund priorities established by the Governor’s Task Force on Mental Health and Substance Use which centered around addressing the state’s shortage of drug treatment capacity. The House had given Gov. Pat McCrory the $30 million he asked for to fund those priorities, but in one-time dollars only. The Senate ignored the governor’s requests in their budget.

“It was very important to the Governor’s office and the Secretary [of Health and Human Services] to get some recurring money in there because that way they can get in there and hire some personnel and move forward with their plans,” Lambeth said.

The budget also allocates $10 million in one-time funding for those priorities.

The spending plan also allocates $20 million from the sale of the Dorothea Dix Hospital property to establish mental health capacity around the state in the form of new beds for crisis services for both adults and children. The document also stipulates those beds would be exempt from some existing state regulations about the distribution of local capacity in order to speed up construction.

On top of that, the budget includes additional money to whittle away at multi-year waiting lists for community services for people with intellectual and developmental disabilities, funding 250 extra slots for services.

“We’re really pleased to get more assistance for these families,” said Julia Adams-Scheurich, a lobbyist who represents agencies doing work with the I/DD population.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...

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