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@NCCapitol

Agency heads: Budget cuts too deep

Posted May 27, 2011 6:59 p.m. EDT

As the state Senate prepares to vote next week on a $19.4B budget plan, heads of state agencies said today the cuts in the proposal will affect everyday services from public safety to health care.

The Senate plan cuts more from Health and Human Services than the House plan did, coming in at around $370 million less than Gov. Bev Perdue's proposal.  DHHS Secretary Lanier Cansler said today the cut would further cost the state about $700M in federal matching funds. That adds up to a billion or so a year that won't be coming into the state's economy through the health care system, which Cansler warned will lead to "substantial job losses." 

The Senate plan would require Cansler to cut back or eliminate Medicaid services like optical and dental care and physical therapy. And Medicaid providers would see their reimbursement rate cut by 3% in the Senate plan. The House had proposed a 2% cut. Neither plan allowed for inflationary adjustment.

"They're getting squeezed," Cansler said of Medicaid providers. "Sooner or later, those services will start to disappear. The question is, when does the camel's back break?"

(Watch the story from tonight's 5:30 newscast at right.)

Cansler also expressed concern over the Senate's proposal to end Medicaid coverage for "over the counter" medications as of July 1st.  He says the change could end up costing money rather than saving it. 

That coverage, he said, applies only to specific drugs, "a list of a couple dozen that we have chosen over the past few years that are less expensive than either the generic or brand name - that if a physician writes a prescription for it, we will pay for it," he explained.

"And among those over-the-counter drugs is insulin for diabetics," Cansler continued. "So the elimination of that creates a number of problems." 

Public safety officials issued dire warnings, too. 

"The public will be less safe," said Crime Control and Public Safety Secretary Reuben Young. "We will lose troopers."

NC National Guard Adjutant General Greg Lusk said the cuts to Guard funding may look small in the overall budget, but they may mean cutbacks to the services the Guard provides to families of deployed Guard members. "We're going to be forced to look at whether we keep armories open," he added, though he stressed that "soldiers and airmen will respond" when called upon. 

State Emergency Management director Doug Hoell said the proposed 15.5% cut to his funding would likely have to come out of operational money. He says he's also concerned about cuts to other agencies his team partners with, like the State Highway Patrol, the National Guard, DENR, and HHS.  

"Quite frankly, I  think we did a good response on the tornadoes," Hoell said. "But hurricane season is on the horizon, and we've got to be ready for that." 

You can see the unedited video of the press conference below.