A projected $139 million hole in Medicaid funding next year has state health officials worried about how cuts would affect 1.5 million of North Carolina's most vulnerable citizens.

The state Department of Health and Human Services has warned state lawmakers that, unless the shortfall is filled, many programs will likely be eliminated, including in-home care and mental health, hospice and dental services. The agency may also be forced to further cut reimbursements to medical providers who treat Medicaid patients.

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Republican leaders, who penned this year's budget, say it's Gov. Bev Perdue's problem to fix.

"I'm not sure that the hoopla we're seeing is really justified at this point," said Republican budget writer Sen. Pete Brunstetter.

Rep. Nelson Dollar agreed.

"The governor does have broad powers to manage the budget of the state of North Carolina (and) to execute that budget," Dollar said.

Democratic Rep. Verla Insko, however, said the governor does not have the authority to take money from the state budget and funnel it toward a specific program.

Earlier this week, Perdue accused Republicans of reneging on an agreement to plug the funding gap with budget surplus or rainy day funds. House Speaker Thom Tillis responded that the legislature was only considering its options when talking about infusing cash into the Medicaid system and had made no promises to do so.

While the two sides butt heads over who is responsible to come up with a solution, 1.5 million North Carolina residents who rely on Medicaid remain in limbo about what services they can count on in 2012.

Alison Davis, a single mother with three sons with autism, said she's worried about what would happen if her children lost state-funded care.

"They're not going to be able to develop their self-help skills. They're not going to be able to be independent. They're not going to be able to hold a job. They're not going to be able to even shower or dress themselves," Davis told legislators Wednesday.

She implored lawmakers to find a way around drastic cuts.

"We have to do better," she said. "These cuts are not acceptable."