Public Policy Update: State Budget 2013 to 2015

Photo credit to Mr. T in DC via

Photo credit to Mr. T in DC via

State Budget 2013-2015

During the long legislative session, such as the one currently going on, the General Assembly creates a two year budget for the state. This session, the NC Senate started the process by passing a proposed budget bill several weeks ago. The NC House has now responded with their budget proposal. The two bills have different budgeted numbers and priorities, so once the House passes their version, a conference committee of NC Senate and House members will be named to negotiate the differences and come out with a compromise bill. That compromise budget bill then must be signed by the Governor.

Complicating things for the budget this year are proposals for tax reform from the House and Senate. Because both chambers are interested in changing our tax structure and rates, the two proposals have the potential to impact the amount of money the state collects in taxes, and therefore the amount of money the state can budget for services like schools, safety, and health care, including services for people with developmental disabilities. It’s not clear if the conflicting tax proposals will be sorted out by the end of June when the long session is scheduled to end. It’s also not clear if the proposals will change the amount of funding available for health, disability, and education services needed by people on the autism spectrum.  Below are items in the budget that affect individuals with autism, developmental disabilities or are somehow related.

  • Cuts to Children’s Developmental Services Agencies (CDSAs) – $8 million in year one (FY 2013-2014) and $10 million in year two (FY 2014-2015). These cuts are recurring.

CDSAs are responsible for assisting families with young children who have been identified with developmental delays to get services and connected to resources that help the child to get on a better developmental track. Early intervention is critical for reducing future disability and for reducing long term costs. Both the Senate and House budgets direct the Division of Public Health to close 4 of the 16 CDSA offices, with a priority to keep open the ones with the highest caseload. This item was also in the Senate budget.

  • Add funds for adult vocational developmental programs – $ 250,000, Recurring.

This is a House only item, not in the Senate budget. According to discussion in the committee where this amendment was made, it is intended to serve about 40 adults on a waiting list, though it’s not clear from the amendment if this is statewide or for a specific program location.

  • Add Group Home Funds (to replace funds lost due to changes in personal care services) – $8 million in Non-Recurring funding in the first year.

Background: Group homes in North Carolina are funded in a very confusing and convoluted way. Personal Care Services (PCS) funding was filling in for reductions in rates that happened many years ago. Changes to PCS ended that service for some people living in group homes. This meant people could not be adequately supported (from a funding standpoint) to live in these settings. NC still needs a long term fix for how to fund residential supports and services for people with intellectual and developmental disabilities.  The state needs to have a plan that accounts for what people need, what the service and supports would look like and how we would fund it.The House budget funds group home services, the Senate makes no mention of fixing this ongoing problem.

  • Medicaid: Funds the rebase and shortfalls in Medicaid to ensure ongoing health care services and an increase in those eligible. Some services now require additional co-pays, have reductions in the number of services allowed without prior authorization or have other limits imposed. The House budget imposes rate freezes on some services that previously got automatic inflationary increases. There are no additional funds for Innovations waiver slots in the budget.
  • Personal Care Services -House and Senate Budgets have different special provisions (policies about funds in the budget) on PCS. These policies are intended to provide additional personal care services for people with dementia, especially those in special acre units which were affected by changes to personal care services. Those same changes reduced funding for group homes for people with intellectual and developmental disabilities and mental illness, but this provision does not address their needs.

The Senate sets criteria for getting up to 80 hours of personal care at home or in adult care homes to require hands-on help with eating, dressing, bathing, toileting and mobility. People are eligible for an additional 50 hours of personal care services if they need supervision, have a memory problem like dementia or Alzheimer’s, require a safe environment, and exhibit safety concerns. The House passed House bill 492 which does something similar to the Senate budget special provision.  Special provisions are only in place for as long as the budget is in place (two years) and can be easily changed during the budget adjustments process at the end of year one. Legislation, like H492, once passed is in statute and more difficult to change or remove. (Note that according to existing law, PCS cannot include babysitting, coaching, prompting, guiding, transportation or financial management.)

  • Special Assistance (SA) -Both the Senate and House budget have similar provisions to create a six county pilot program to test tiered rates for personal care services in group homes, assisted living residences and people who are Medicaid eligible living at home. The House budget sets rates for SA at the same levels as the previous year.
  • Eugenics Settlement Funds – $10 million Non-Recurring

The House budget funds compensation for victims of the state of North Carolina’s eugenics program, the Senate does not. Speaker Tillis and other House members have been committed for a number of years to funding compensation to living victims of state imposed sterilization programs. The Senate has not passed similar legislation or included it in their budget. This difference will need to be addressed in conference committee.

  • Wright School -The Senate budget closes Wright School and the House does not make this cut, leaving the funding for the therapeutic school, which serves elementary school age children with serious emotional and behavioral disorders.
  • Public Education/Schools -The Senate budget replaces some of the “management flexibility cuts” to local school districts, but in turn reduces funds to teachers/class size and teachers assistants in the K-3 grades.The House budget replaces some of the cuts made in the Senate budget to teacher assistants, but makes other cuts to things like instructional supplies and salary differentials.
  • Children with Special Needs Education Scholarship – As mentioned in a previous post, there is a House bill to get rid of the child with special needs education tax credit (H344) and replace it with  a scholarship program.  The House budget funds this new scholarship with $3.6 million in the first year and $4.3 million in the second year. The scholarship would have similar eligibility criteria, but would not be dependent on paying taxes to qualify for a refund. Instead, families could apply for a scholarship, regardless of income levels, which would open it up for lower income families.

Comparison chart

Budget Area and Item NC Senate NC House Policy
Education (Elementary, Community College, Universities) (242,535,137) R and NR (263, 640, 677) R and NR Overall both the House and Senate budgets cut about $250 million in funds for all education, but do so in different areas and for different purposes. Not all the cuts and increases are covered here, just a few critical ones.
Teacher aides ($142, 329,582) R and($149, 188, 180) R ($24,621,965) R and  ($29,114,988) R House and Senate disagree on the amount of the cut to teacher’s aides. Senate would have greater reductions across all grades.
Classroom Size and Flexibility Cuts (These cuts allow local schools to determine where cuts are made) ($286, 433,312) R and ($245,897,168)R. The Senate also returns $376 million in flex funds both years The House does not cut teacher funds.The House returns some flex cuts: none in the first year $7 million in the second year The Senate returns funds from the previous year’s flexibility cuts, but then cuts other funds including those that fund classroom teachers, thus increasing class sizes. 70% of schools have already reduced the number of teachers and increased class sizes due to previous years “flexible” cuts. House retains the current flexibility cut, but then reduces by 2% in the second year.
Excellent Public Schools Act ($18,578,841) R and ($35,109,480) R The Senate funds its education reform bill, which includes section requiring screenings for developmental and learning problems in early grades. House includes no funding for these changes.
Health and Human Services The biggest issue here is that the Senate and House fund increased costs in Medicaid without making major cuts to services – though there are some reductions and increased management of numbers of visits.  Both budgets cut early intervention funds and close CDSA offices.
Early Intervention – CDSAs ($8, 000,000) R and ($10,000,000) R ($8, 000,000) R and ($10,000,000) R Senate and House budget are the same. Cuts $8 mil/ $10 mil closes 4 CDSAs that provide coordination of services and resources for families and children with developmental delays and disabilities.
Wright School ($2,709,912) R both years Senate eliminates the state’s 24 bed residential school/treatment program for children with complex mental health and behavior disorders. House does not make this cut.
Mental Health Drug prior authorization ($4, 975,290) R and ($11,258,127) R The Senate reduces funds for prescription drugs by instituting prior authorization for mental health medications under Medicaid.  In other places prior authorization policies have resulted in increased costs to justice, public safety and hospitals when people cannot get medications. The House allows DHHS to use other medication management techniques to reduce costs/usage of brand name drugs and reduces the impact of new eligible in Medicaid to find funds to cover greater costs for medications.
Group Home Funds $8,000,000 NR The House funds a one year fix for lost funds to group homes due to changes in personal care services. The Senate does not fund this item.
Adult Vocational Program Funds $ 250,000, R and $250,000 R The House funds for an estimated 40 new adult vocational program slots. This item was an amendment during the committee process and it’s not clear if it’s statewide, or for a specific local program.
Other Budget Items
Eugenics Victims(in Statewide Reserves) $10,000,000 The House passed a bill two years ago to compensate victims of the states eugenics program which sterilized people including those considered to have mental disabilities, children in reform schools and others, which was not funded at that time. It is included in the House budget. The Senate has not put any funding in theirs.


  • ( ) numbers in parentheses mean a cut, or reduction in funding.  Other numbers without parentheses mean an increase in funding or a new appropriation.
  • R = recurring cuts, cuts will be ongoing or permanent
  • NR = non recurring cuts, one time cuts
  • First number is first year of budget 2013-2014, second number is second year of budget 2014-2015

Jennifer Mahan is the Director of Advocacy and Public Policy for the Autism Society of North Carolina. She can be reached via email at


2 Responses

  1. Minor point of correction on the CDSA closures–this post indicates a priority to keep open those with the highest caseload. The Senate bill language actually called for priority to be given to those with the highest caseload *of rural and medically underserved* populations. That puts the CDSA offices with the highest caseloads squarely in the crosshairs, as they are the ones in urban areas with lower underserved populations. Closure of the 4 largest CDSAs could be devastating to early intervention in North Carolina.

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