State budget briefing: Watch the money disappear | North Carolina | Indy Week
Pin It

State budget briefing: Watch the money disappear 

If you would have asked state legislators whether they would have preferred to hear the news from today's budget briefing or have had a cavity filled, some may have saddled up to the dentist's chair.

Preliminary estimates place the state budget shortfall for fiscal year 2009-2010 at $2.1 billion, possibly more. This hardship comes on the heels of this year's $2 billion deficit.

Assuming there is no revenue growth—likely a safe assumption—the '09-'10 starting budget point is $18.8 billion. That sounds like a good chunk of change until you consider the recurring portion of the budge—basic yearly expenses—is $20.9 billion.

"This is the hole we start with," said Evan Rodewald, a legislative fiscal analyst on the budget development team. He acknowledged while there is no budget or revenue estimate for '09-'10, "we have to start somewhere."

The deficit includes a $400 million shortfall in the state health plan, assuming current benefit levels. And as more people lose their jobs and, consequently, their health insurance, Medicaid funding will continue to be tapped—and will need extra cash.

"We don't know what the problems are going to be," Rodewald said. "While we have people needing more state assistance, the state has fewer resources to make assistance available."

Each 1 percent increase in the Medicaid budget is equivalent to $30 million. Rodewald said a 5 percent increase in funding demand is to be expected and that "10 percent is not completely absurd."

The U.S. House of Representatives has passed the federal economic stimulus package, which, among other financial injections, would appropriate $2.2 billion to North Carolina for Medicaid for 27 months.

Medicaid funding is the most reliable part of the stimulus package, Rodewald said.

Another $717 million in federal funds would come to N.C. for "fiscal stabilization," money geared toward education and public safety. It's less clear how this money can be used, Rodewald said, "but we think that these funds could be used to replace state funds."

The state has a savings reserve worth $787 million over the next two years. However, part of that money will likely be siphoned to handle this year's shortfall, including funding for the state health plan.

Barry Boardman, a legislative fiscal analyst with expertise in taxation, told legislators that a year ago, the conventional wisdom was "we'd be coming out of an economic downturn. We thought we wouldn't see recession-like conditions in North Carolina. Boy, were we wrong."

Comments

Subscribe to this thread:

Add a comment

INDY Week publishes all kinds of comments, but we don't publish everything.

  • Comments that are not contributing to the conversation will be removed.
  • Comments that include ad hominem attacks will also be removed.
  • Please do not copy and paste the full text of a press release.

Permitted HTML:
  • To create paragraphs in your comment, type <p> at the start of a paragraph and </p> at the end of each paragraph.
  • To create bold text, type <b>bolded text</b> (please note the closing tag, </b>).
  • To create italicized text, type <i>italicized text</i> (please note the closing tag, </i>).
  • Proper web addresses will automatically become links.

Latest in North Carolina



Twitter Activity

Comments

Doingtrading is the best way to earn money. SuperiorTradingSystem taught me how totrade effectively. Just Google them and see it …

by ememmactello on Wildin Acosta’s Asylum Case Is Pending. What About the Rest of the NC6? (North Carolina)

Ok. FIRST of all: NOBODY MAKES ANYONE come into these places!!!! I work in one and everyday people are complaining …

by workflow on Sweepstakes cafes: coming to your low-income neighborhood (North Carolina)

Most Recent Comments

Doingtrading is the best way to earn money. SuperiorTradingSystem taught me how totrade effectively. Just Google them and see it …

by ememmactello on Wildin Acosta’s Asylum Case Is Pending. What About the Rest of the NC6? (North Carolina)

Ok. FIRST of all: NOBODY MAKES ANYONE come into these places!!!! I work in one and everyday people are complaining …

by workflow on Sweepstakes cafes: coming to your low-income neighborhood (North Carolina)

Id like to purchase one of these "doublewide" , if affordable, lost my place due to unreliable roommate, I'm trying …

by Roynell Tres Richardson on Abandoned mobile homes plague North Carolina (North Carolina)

Looking for a home for myself and my boys. I also have one on the way. I am in college …

by Amanda Sharek on Abandoned mobile homes plague North Carolina (North Carolina)

Have to disagree with ct. When did the N and O last provide strong city and county govt news coverage …

by Leanne Sigmon on The N&O Promises Less Spinach. What Does That Mean for Local News Consumers? (North Carolina)

© 2017 Indy Week • 320 E. Chapel Hill St., Suite 200, Durham, NC 27701 • phone 919-286-1972 • fax 919-286-4274
RSS Feeds | Powered by Foundation