House Approves its Budget Adjustments Bill

GA Front

As we wrote about in a previous budget update, the NC Senate passed its version of the budget on May 30. That Senate bill contained a number of cuts and policy changes that would negatively affect people on the autism spectrum and people with disabilities. The House responded with its version, which passed Friday, June 13. The NC House and NC Senate will still need to resolve differences between the two bills for any budget changes to go into effect.

Below are items in the NC House’s proposed budget that affect individuals with autism or developmental disabilities or are somehow related. (You can view the proposed House and Senate budget adjustments in their entirety by going to the General Assembly’s website at Links to budget documents are on the left. Most recent documents are at the top.)

Public Education/Schools: The budget overall increases funding for state’s K-12 public schools by $16.4 million, for North Carolina’s community colleges by $25.7 million, and for the University of North Carolina system by $30 million.

K-12 Schools: The House education budget provides a 5% raise for teachers without forcing them to forfeit tenure. The House proposes funding the raises through doubling the amount of money that the lottery can spend on advertising from 1% to 2% of net proceeds. The projected $106 million in additional revenue would fund teacher raises. There are some smaller cuts to bus replacement and merit pay for teachers.

The House version of the budget:

    • Provides teachers with an average 5% increase in salary.
    • Does not address the issue of tenure.
    • Provides $18.7 million to restore master’s supplements for a graduate program if the coursework was started as of July 1, 2013. In addition, if a teacher begins a master’s program and then teaches in that field, they will also receive the master’s supplement.
    • Fully funds the Career Pathways pilot program at $9.8 million to provide differentiated pay to teachers demonstrating effectiveness or assuming additional responsibilities.
    • Does not cut teaching assistant positions in grades K-3; maintains full funding for K-3 teaching assistant positions statewide.
    • Does not include additional funds for the Read to Achieve program.

Cuts to CDSAs: The $10 million, year-two recurring cut to the state organization that manages early intervention services remains in the budget. New special provision language gives the Department of Health and Human Services (DHHS) the flexibility to determine how this budget reduction will be achieved and does not require the closure of four CDSAs. (CDSAs assist families with young children who have been identified with developmental delays to get services and connect to resources for their children.)

Medicaid, Health, and Human Services: The House version of the budget does not include changes to Medicaid eligibility or Special Assistance eligibility or a 2% rate cut to providers.

The House version of the budget:

    • Does not include any Medicaid eligibility changes.
    • Does not include any changes in eligibility for State County Special Assistance.
    • Establishes a $117.8 million State Risk Reserve for Medicaid Program.
    • Provides $9.3 million in state and federal block grant funds for community based crisis services.
    • Does not include the 2% across-the-board rate reduction to Medicaid providers.
    • Does not recommend moving the NC Division of Medical Assistance out of the NC DHHS into its own department.

Study Additional 1915 C Waiver (Innovations/CAP) slots: Section 12H.5 of the budget special provisions directs the NC DHHS, Division of Medical Assistance, to design and draft a 1915(c) wavier that meets the following requirements: the waiver should create 1,000 new slots each year for 3 years to serve a total of 3,000 additional adults with developmental disabilities from January 1, 2016, to June 30, 2019. The budget for each slot should be capped at $20,000 per plan year, per beneficiary, and slots will target individuals on the registry of unmet needs. The slots should be managed as part of the LME/MCO managed care system.

CAP/Innovations provider tax: The House budget special provisions SECTION 12H.18.(a) appears to require an “assessment” (read “tax”) on providers of CAP/Innovations services. Two other states have done similar assessments. It’s believed that this 3.5% tax is an effort to draw down funding from the federal government for additional services through an increased capitation rate. The provision calls for that funding to increase rates for services in Innovations, offsetting the cost and providing funds for additional services. Concerns remain about the feasibility of the plan and assurances that would need to be put in place to prevent the assessment from becoming an effective provider rate cut.

Personal Care Services Study: Section 12.H.10 of the budget special provisions would contract a study of Personal Care Services Options. The Joint Legislative Oversight Committee on Health and Human Services will hire a contractor to study issues related to reforming and redesigning Personal Care Services (PCS) while meeting the state’s obligations under the Americans with Disabilities Act and the US Supreme Court’s decision in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999). The study will look at who is getting PCS, in which settings, how many are served, anticipated growth, current costs, and sources of funding. It will also examine alternative models, including whether more cost-effective assistance could be offered through the new 1915(i) state plan home- and community-based services option and 1915 waiver options for each category of Medicaid recipient, and offer recommendations about outcomes for the redesigned program.

Group Home Short-term Fix extension: In addition to the study on PCS, House special budget provision Section 12.A.7 ensures that funds are available for short-term payments to group homes to replace funding lost by changes to PCS while a more permanent fix is found for these funding gaps. Background: Group homes in North Carolina are funded in a very confusing and convoluted way. PCS funding was filling in for reductions in rates that happened many years ago. When changes to PCS ended that service for some people living in group homes, people could not be adequately supported to live in these settings. NC still needs a long-term fix to fund residential supports and services for people with intellectual and developmental disabilities. The state should have a plan that accounts for what people need, what the service and supports would look like, and how we would fund it.

Study Vocational Training for I/DD: Special Provision 10.4.(a) directs the Joint Legislative Oversight Committee to study issues related to vocational training of people with intellectual and developmental disabilities and report to the 2015 General Assembly. This item is the same as the provision in the Senate budget. The study would look at:

  • Model programs for community colleges for developing vocational expertise and job readiness
  • Enhancing employment outcomes
  • Barriers to employment
  • The establishment of college and university partnerships to enhance job training and placement
  • Policies for ensuring students are prepared for higher education
  • Policies for transition planning and job training in elementary and secondary education.

Guardianship: Special Provisions Section 12D.3 and 4 cover many of the recommendations of the Study Committee on Public Guardianship:

  • Calls for a plan for evaluating complaints pertaining to public wards under the care of publically funded guardians that included face to face observation of the ward, an interview with the ward or both.
  • The plan shall include a requirement that someone with experience in understanding the unique needs and abilities of the ward be assigned to conduct the observation or interview
  • Continued study of the use of care coordination for oversight of conflicts of interest when guardians serve as paid providers
  • Outlines a specific process for status reports filed by public guardians and the content of those reports, including medical and dental exams, the guardian’s performance, the residence, education, employment, and rehabilitation or habilitation of the ward, efforts to restore competency, efforts to seek alternatives to guardianship, efforts to identify alternatives to corporate or public agency guardianship, and recommendations for implementing more limited guardianship.

Medicaid County of Residence: The House includes Medicaid County of Residence language in its special provisions in section 12H.35 This bill passed the House last legislative session and would allow individuals served by the 1915 b/c waiver (ie those with intellectual and developmental disabilities, mental health issues, and addictive diseases served by the LME/MCOs) to be exempt from rules regarding Medicaid home origin. This allows portability of Medicaid services and allows people the choice to move to move throughout the state while still retaining eligibility and services.

Wright School: The House budget does not close Wright School, which serves elementary-age children with serious emotional and behavioral disorders.

Budget Process Background

During the long legislative session last year, the NC General Assembly created a two-year budget for the state. During this year’s short legislative session, lawmakers review the budget and make adjustments based on current spending, revenues, and any new priorities. The governor released his budget proposal several weeks ago, and the Senate passed its budget adjustment bill May 30.Afterthat vote, the bill moved to the House, which passed its version June 13. Following that passage, a conference committee is named and negotiations take place between the House and Senate over differences in the final bills. Any budget adjustments should be in place by June 30, the end of the state’s fiscal year. The state has a two-year budget, so a budget is already in place for the 2014-15 fiscal year. Any adjustments bill would make changes to that existing budget.

If you have questions about public policy issues, please contact Jennifer Mahan, Director of Advocacy and Public Policy, at 919-865-5068 or


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