Monday, January 3, 2011

"Schools, health care will help close NC budget gap": Medicaid, Teachers, Elderly, Prescription Drugs and Dental Care

"North Carolina's $3.7 billion gap between expected revenues and expenses for the next budget year
...starting July 1 likely will be more onerous than the one two years ago.

...The GOP and Perdue have said a pair of temporary income tax increases set to expire this year should end - erasing a potential $1.3 billion in revenues.

And gone will be $1.6 billion in federal stimulus funds.

Next year "is the hard year..." Perdue told reporters...

"We've fallen off the cliff."

...there's no doubt health care and public education will take the biggest hits because the two areas take up 78 percent of the spending in the current $19 billion state budget.

The biggest chunks of spending in those areas are teacher salaries and medical care for low-income residents.

There's been talk about increasing public school class sizes, cutting payment rates to doctors and hospitals who treat Medicaid patients or eliminate Medicaid treatment that's not required by the federal government.

...the GOP and Perdue are sharing few details until absolutely necessary.

...Options provided by state agencies to Perdue this fall on how to reach reduction targets of 10 and 15 percent give a taste of the pain those cuts could cause.

The Department of Public Instruction said a 10 percent reduction could mean the loss of 5,300 classroom teaching positions, while the University of North Carolina system said they might have to eliminate funding for 2,000 positions.

The Department of Health and Human Services identified potential cuts to care for Medicaid patients with mental or physical disabilities and for the elderly living at home.

The reduction options, if implemented, would result in the loss of 21,000 positions, or 7.4 percent of the state government work force, according to a report from the liberal-leaning North Carolina Budget & Tax Center.
If $3.7 billion divided by 21,000 = $176,190.48 per job,
but $3.7 billion divided by $60,000 per job = 61,667 jobs,
and $3.7 billion divided by $50,000 per job = 74,000 jobs,
how did the N.C. Budget & Tax Center come up with 21,000 jobs?
...Sen. Richard Stevens, R-Wake, another projected co-chairman of the Senate budget committee...said trimming the number of optional Medicaid services that North Carolina provides probably will be considered. The optional services cost $1.1 billion, but include items many people wouldn't consider optional, such as prescription drugs and dental care."


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