House leaders: Budget gulf remains wide

At a House conference committee meeting Monday, negotiators reported no progress on the biggest issues dividing the House and Senate budget plans.

Senior Budget Chairman Nelson Dollar said House and Senate subcommittees have made substantial progress in resolving differences in several budget areas, but not in education and Health and Human Services – the two most critical areas of dispute. 

Dollar, R-Wake, told the committee the two chambers remain divided over teacher and state employee raises, funding for teaching assistants and Medicaid eligibility – the same sticking points that have stalled conference talks for weeks.  

He said the House has agreed to offer a 6 percent average raise to teachers, up from 5 percent in its initial proposal. The Senate, he said, has not moved from its 11 percent raise position.

He also said the latest Senate offer, unveiled last Thursday, actually cuts more funding from HHS, rather than less.

The $233 million in Medicaid cuts in the Senate plan, Dollar said, would mean the loss of an additional $400 million in matching federal funds, totaling a $633 million cut to current services.  

Those cuts, he said, would end Medicaid eligibility for 16,000 aged, blind and disabled individuals currently living in long-term care facilities. Without coverage, he warned, many would have to return to live with their families. For those without that option, county departments of social services would likely have to pick up part or all of the cost of care.

The cuts would also affect 21,445 patients who receive personal care services in a home or community setting, a service that can help keep people out of more expensive residential settings. 

Senate Budget Chairman Ralph Hise said during floor debate in May that those losing Medicaid could buy coverage through the Affordable Care Act instead.  But Dollar said the federal health care exchange does not offer coverage for long-term care.

"Who's going to pick up that tab?" he asked. 

Counties would also be hit hard, said House Budget Chairwoman Linda Johnson, by the Senate's proposed teacher pay raise. She said many counties hire additional teachers at the same wage as state-funded teachers.

"Most [county budgets] have already been worked on and finished," Johnson, R-Cabarrus, noted, with counties setting aside money to match a 5 to 6 percent raise, not 11 percent. The difference could add up to millions for some districts.  

In the meantime, Dollar said, the cuts to teaching assistants required to pay for the Senate's 11 percent raise would mean pinks slips for 5,000 TAs, mostly in second-grade classrooms, as well as 1,200 teachers paid for with teaching assistant funding. 

Dollar said the House has offered to give up $19.5 million for additional teaching assistants to meet enrollment growth. But he said the House would hold the line on maintaining existing positions. 

Likewise, he said, the House is "very concerned" about any cuts to Medicaid eligibility. He said House negotiators have agreed to an additional $53 million in HHS cuts to meet the Senate's demands. Although those cuts aren't currently specified, he said, they would not affect eligibility.

Still, the two sides are more than $300 million apart at this point, he said.

"We’re looking forward to continuing to work with our Senate colleagues to achieve an acceptable set of budget adjustments, if possible," Dollar told the panel. "If not possible, obviously, we have a budget in place that we could move forward with. But we’re hoping to do a little bit better than that."

Senate President Pro Tem Phil Berger's spokeswoman, Amy Auth, responded, "Senators are committed to raising teacher pay and plan to continue working until an agreement is reached." 

The Senate's budget conferees did not attend Monday's meeting, although name cards had been set up for them.

"Everyone was certainly invited to be here today," remarked Dollar.

Members of Gov. Pat McCrory's administration were present for the meeting, including McCrory budget chief Art Pope. The governor publicly sided with the House's budget proposal last week.