NC Budget Update
After more than a month of contentious negotiations, the House and Senate finally compromised and passed the $21 billion budget for fiscal year 2014-2015. The House voted 66-44 and the Senate voted 33-10 to give final passage to the budget. The governor is expected to sign the budget into law early this week.
Here are some of the highlights from session that impact children:
- Teachers - The budget will provide teachers with at most a 7 percent pay raise. Veteran teachers will see less of an increase and new teachers will see a boost in a starting teacher salary to $35,000 over two years. The concern going forward is that the financial wrangling that went into finding more money for teachers and the money to retain teaching assistants may not be there next year.
- Read to Achieve – A bill updating Read to Achieve was signed by the Governor. This bill provides local school districts with more flexibility in assessing 3rd grade reading skills.
- NC Pre-K – TANF (Temporary Assistance for Needy Families) swap for Pre-K – The budget replaces nearly $20 million in general fund dollars with TANF funds on a non-recurring basis. TANF is federal dollars and leaves advocates concerned about future funding for this program.
- Common Core – The bill, signed by the Governor last month, replaces the Common Core with the North Carolina Course of Study. While the bill technically repeals the Common core, the Academic Standards Review Commission and the State Board of Education are still allowed to use Common Core standards in the new North Carolina Standard Course of Study.
Child Care Subsidies
Subsidy eligibility is changed from 75% of state median income for all children birth to 12 to the following:
- Age 0-5 – 200% of Federal Poverty Level (FPL).
- Age 6-12 – 133% of FPL.
- Child with special needs of any age – 200% of FPL.
- Subsidy funding is cut by $7.7M as a result of these eligibility restrictions.
- Sliding scale for parent fees is eliminated and replaced with a flat 10%.
- Subsidy funding has been cut by $1.6M due to estimated increases in parent fees. Children receiving child care subsidy through Child Welfare, Child Protective Services, and Foster Care will continue to be exempt from the co-payment requirement.
- Co-payments are no longer pro-rated for partial day care.
- Subsidy funding has been reduced by $2.1M to account for this estimated increase in parent fees.
This change is expected to impact 25% of school aged children currently receiving the subsidy in Mecklenburg County leaving many families with few options and lots of potential risk.
Medicaid – Reduction of $135 million. Preserves current levels of eligibility for Medicaid benefits.
The House and the Senate could not agree on how to reform Medicaid and have called for a special session after elections in November to address this issue. There are many options on the table including privatization, provider networks, etc. All will have huge repercussions for families receiving Medicaid and may result in a dramatic changed to the delivery of both physical and mental health services. Stay tuned.
Raise the age – Historic legislation that would allow 16- and 17-year-olds to be charged as minors rather than adults in the criminal justice system passed the House in May after failing multiple times in the past decade. North Carolina and New York are the only states in the country that automatically try 16- and 17-year-olds as adults in the criminal justice system. But almost two months after overwhelmingly passing in the House, the bill languished in the Senate. Council for Children’s Rights will look to lead the charge on this issue in Raleigh.
What to look for in 2015:
- North Carolina income tax collections for 2014 are expected to fall $205 million short of earlier projections following Republican-backed tax cuts approved last year. A memo from the legislature’s Fiscal Research Division says the wages of North Carolina’s workers haven’t grown as fast as originally forecast, resulting in the projected cost of the 2013 tax cuts rising from $475 million to $680 million. The analysis did not include projected sales tax revenues, which could climb to offset the less than expected money from sales taxes.
- Lower revenues will put additional pressure on the legislature and will probably result in additional cuts. The legislature will have some difficult decisions to make as it sets the budget for the next 2 years.