Capital News Update

Legislative Leaders Predict Final Budget Will Pass This Week!

House and Senate budget conferees continued to meet last week in joint conference committee, working out the differences between the House and Senate versions of state budget proposals, preparing a final package to present to the Governor by July 1st, the start of the state’s fiscal year.

House Majority Leader Hugh Holliman (D-Davidson) indicated last week that the final budget bill could be up for a Senate and House vote early this week. Senate leader Marc Basnight (D-Dare) followed this concurring, saying his goal was to adjourn this legislative session by July 2nd.

One of the major provisions remaining for negotiation among budget conferees involves the anticipated $490 million from Congress for state Medicaid funding. As mentioned, the budget proposals passed by both the House and Senate assumed that North Carolina would receive the pending $490 million from Congress for Medicaid funding, and it had appeared that the final compromise budget would do the same. The U.S. Senate, however, is stalled in its efforts to pass the bill containing this state Medicaid funding. In the last several weeks, the U.S. Senate has not had sufficient votes for the full package. This week, U.S. Senate Majority Leader Harry Reid unveiled a substitute amendment after negotiations that would trim the Medicaid funding from $24.2 billion to $16.2 billion. Just last night (June 24th), the negotiated version also failed on the Senate floor. Senator Reid indicated that the measure is officially stalled.

Given what has been happening in Congress in regard to the Medicaid funding for states, Governor Bev Perdue called on legislative leaders last week to create a section of the budget that assumed North Carolina would not receive the federal Medicaid dollars, forcing budget negotiators to cut an additional $525 million from their proposed budget. While there has not been a clear indication as to where the cuts will occur, House Speaker Joe Hackney (D-Orange) stated this week that he expected state employee furloughs to be discussed among the options. Additionally, other cuts could possibly be set to take effect in January 2011, giving the state time to see if Congress eventually passes the Medicaid funding.