Gov. Josh Stein signed a stopgap spending measure into law Wednesday despite concerns over its potential impact to North Carolina's Medicaid program.
The spending plan allocates $600 million to the state's Medicaid program, but Stein and state health officials say that falls well short of what the state actually needs.
"With federal cuts on the horizon, the legislature’s forced $319 million cut to Medicaid will be particularly painful. Despite these serious reservations, I am signing this bill into law because it keeps the lights on," Stein wrote in a statement.
The state updates its Medicaid spending annually to reflect inflation, changes in federal policy and other measures. The process is known as a "rebase."
But this version comes up $319 million short of N.C. Department Health and Human Services estimates, Secretary Dev Sangvai said in a statement.
Sangvai said that means DHHS will either need to slash how much it pays providers or cut off access to some services for the more than three million North Carolinians who access health care through Medicaid.
"Underfunding NC Medicaid now after years of building a nationally recognized program that delivers real outcomes for the people we serve is a serious setback. The forced cuts from the budget shortfall threaten care for those who need it most and include some of North Carolina’s most vulnerable populations," Sangvai wrote.
During the July 30 floor debate over House Bill 125, Rep. Donny Lambeth, R-Forsyth, described the rebase number as "a work in progress" and acknowledged the General Assembly will likely need to take more action on Medicaid in the fall, in part due to shifting policy from the federal government.
"My guess is we will be back at some point with a new or a little bit more rebase number. We think certainly this gets them going. It's something that they need, better than nothing. We will have to look at some reform within the Medicaid program," Lambeth said.
What else is in the mini budget?
Other measures in the stopgap budget include scheduled "step" raises for teachers based on their experience level; funding for enrollment growth at both public K-12 schools and higher education institutions; and $823 million for state construction projects.
Republican leaders in the House and Senate are still far apart on key elements of the budget, including whether to slow down on triggers that will cut tax levels in the state, raises for state employees and how much the state should spend on a new children's hospital.
The stopgap bill also adds 61 driver license examiner positions at the state's Division of Motor Vehicles over the next two years and funds the opening of three new offices. An audit released earlier this week found that the number of DMV examiners statewide has lagged behind population growth over the last 15 years.
Additionally, the bill creates the Division of Accountability, Value and Efficiency (DAVE) under State Auditor Dave Boliek. The effort mirrors President Donald Trump's Office of Government Efficiency on the federal level.
The legislation provides $6 million for the division to hire as many as 45 employees.
By October, every state agency will need file a report to DAVE describing: a) how they are using public funds to execute their powers and b) vacancies that have been open for six months, efforts to fill them and why they have remained vacant.
"The Division shall assess the continued need for each State agency and the vacant positions within each agency," the law states.
By Dec. 31, DAVE will file a report to the General Assembly recommending which jobs should be eliminated and what, if any, state agencies, divisions or offices should be eliminated.
"The DAVE Act gives our office the tools we need to take a data-driven approach and bring accountability to government in North Carolina," Boliek said in a statement.
