Budget Update 07-29-05
The House and Senate budget negotiators continue their work on the budget and hope to reach a final compromise on the approximately $17 billion spending plan soon. Legislators are trying to pass the budget prior to August 5,2005, when the current "continuing resolution" expires. House Speaker Jim Black said that he and House budget negotiators want to get a budget approved as quickly as possible, but they would not rush through the process and would take the time needed to ensure passage of a good budget that meets the growing needs of our state and its people.
The Senate appears to have given up on its proposal to reduce or eliminate Medicaid coverage for 65,000 elderly, blind, and disabled patients, (that would have saved the state $53 million this year). State officials estimated 8,000 people would have lost their health coverage entirely had the proposal become the law. House and Senate negotiators were still working this week on spending for the Department of Health and Human Services, which oversees Medicaid.
Budget negotiators have reached a tentative agreement that would maintain the current sales tax rate. In addition, the personal income tax rate would remain the same for individuals making an average of $800,000 a year.
The main points of contention between House and Senate budget negotiators are the cigarette tax, adequate pay raises for teachers and state employees, the state health plan, repayment to the state retirement plan, and the lottery. No matter how you feel about the lottery, the idea of placing the item in the budget without the opportunity for discussion and debate is bad government. This idea seems to be coming from the Governor's office, along with an arbitrarily arrived at spending cap which is proving to be one of the biggest budget nightmares. This self-imposed cap is preventing us from adequately funding education, health care, environmental protection, etc. Many of us are quite frustrated by this cap, and hope it does not impede good budget decisions. We remain committed to taking care of our citizens, including our teachers and state employees - not balancing the budget on the backs of our people in need. I have become especially concerned about adequate funding for those in need of HIV/AIDS assistance. We have one of the weakest assistance programs in the country; folks who make more than $12,000 a year who need drugs that cost $13,700 a year, are ineligible in North Carolina. This is an example of how this artificially imposed a spending cap affects real folks, who will die because they can't meet our very strict eligibility requirements.