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Senate Releases Budget Proposal

Unlike the relatively tame budget proposals from the Governor and the House, the Senate budget includes dramatic revisions to funding priorities and policy in everything from K-12 education to Medicaid. Once again, this budget proposal illustrates the difficulty of adequately investing in children with a continuously eroding revenue base.

Due to the number and complexity of the policy and funding provisions, it’s going to take a bit longer than normal to produce a full summary. In the meantime, here are some of the items at the top of our priority list.

Access to Affordable, High-Quality Child Care and Early Education

Child Care Subsidies:

The Senate failed to include two key provisions that were in the House budget that would expand access to high-quality child care. Specifically, Senate budget writers did not increase income eligibility for children in grades K-3 to 200% FPL and they did not reinstate the prorated fee for partial day care.

NC Pre-K: 

The Senate budget would result in the loss of 520 NC Pre-K slots as the budget allocates only $2.3M to replace $5M of nonrecurring funding that expires at the end of the current year.

Smart Start, NC Pre-K, and Child Care Subsidy Merger:

The budget directs the Program Evaluation Division to contract with a third party to develop a plan for merging Smart Start, NC Pre-K, and Child Care Subsidies. The plan is required to be complete by March 1, 2016.

Market Rate Increase:

The budget includes a market rate increase for infant and young toddler child care providers who participate in the child care subsidy program. In English, this means that providers get more money per child, which should help to address the current shortage of high-quality care for infants.

Children’s Health

Funding for Mental Health Treatment:

The budget cuts $185M in funding for LME/MCOs, which are the agencies that provide mental health services. The budget also eliminates the Wright School, which provides intensive inpatient services for the highest-need children in the state.

Infant Mortality Prevention:

The Healthy Babies Bundle, a package of public health programs designed to improve birth outcomes, is fully funded in the Senate budget. However, funding for grants to local health departments to improve birth outcomes is only $2.5M in FY16 compared to $5M in the House budget proposal.

Medicaid Reform:

The Senate budget includes a complete overhaul of Medicaid, which provides health care coverage for over 1 million children statewide. The Senate’s Medicaid plan would do the following:

  • Change the current fee-for-service system to a managed care system in which a private managed care company or Provider-Led Entity receives a lump sum to care for a specific patient population.
  • Integrate behavioral health with physical health.
  • Move oversight of Medicaid and NC Health Choice to a new Health Benefits Authority.
  • Fully implement the new system by August 1, 2017.
  • Eliminate Community Care of North Carolina, the state’s highly-successful care coordination program.
  • Increase rates to primary care physicians.

Over the next few days, I’ll provide a more detailed analysis of the Senate Medicaid plan and its potential impact on children.

Child Welfare

Child Welfare Case Management System:

Currently, the state of North Carolina is unable to track children in the child welfare system across county lines, which leads to obvious safety concerns. The Senate budget includes funding for a new case management system ($5.8M in FY16 and $13M in FY17) that is specifically not NCFAST, which has been plagued by problems since its original implementation.

Foster Care through Age 21

The Senate budget would increase the age of foster care to 21, which provides critical support for children in foster care as they move towards independence.

K-12 Public School Funding

Class Size Reduction:

The Senate budget reduces class size in grades K-3 by one student per teacher in FY16 and two students per teacher in FY17 (for grades 1-3 only). This is funded by an $80M allocation in FY16 and a $192M allocation in FY17.

Teacher Assistants: 

Senate budget writers cut 5,289 teacher assistants in FY16 ($57M cut) and 8,592 in FY17 ($166M cut).

Juvenile Justice

The budget includes a $2M recurring allocation for adjudicated juveniles in state facilities. The budget also increases the budget for community programs to $20.1M, an 11% increase.

For those of you interested in doing a deep dive, here are links to the different parts of the Senate budget proposal:

HHS Money Report
HHS Special Provisions

Education Money Report
Education Special Provisions

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