House Budget Hits Health & Human Services

Early this week, the N.C. House rolled out the preliminary stages of its much anticipated biennium budget proposal for the Department of Health & Human Services (DHHS), which was recently presented before the House appropriations committee. Not surprisingly, this proposal featured deep cuts to a plethora of government programs in order to reconcile an over $2 billion budget shortfall. House Republicans are proposing to cut no more than their exact targeted reduction of 10.7 percent, or $527 million from DHHS, and are utilizing a range of accounting maneuvers to reduce the impact of cuts to critical services, including consolidating different bureaucracies, swapping state with federal funds, etc. There were many aspects of commonality between the Governor’s and House’s propels for DHHS, however, wide ranging disagreements were pervasive throughout the two proposals.

The highlights include:

• Transfer More at Four into DHHS: House Republicans report that transferring More at Four into DHHS from the Department of Public Instruction (DPI) was necessary to save money and preserve slots of children in the program. Fiscal Research reports 2,600 slots will be reduced (as opposed to 6,500 if left under DPI), leaving 29,000 children funded under the program. Around $30 million will be saved through this transfer.
• Reduce Smart Start Budget by 20 Percent: While the Governor proposed a minor $9.4 million cut to Smart Start, House Republicans increased the proposed cuts on Smart Start to $37.6 million, totaling 20 percent of Smart Start’s $188 million budget.
• Eliminate State Abortion Fund: While not constituting a large sum of money, this proposed cut represents a symbolic move on the part of the House to prevent tax payer funding for abortion services. The total cut amounted to $50,000.
• Cut NC REACH Scholarships in half: NC REACH – Education Assistance for Adoptees and Foster Youth provides scholarships to students in a North Carolina public college or university who have been adopted or received foster care by the Department of Social Services. This reduction will leave around $1.6 million left to provide these scholarships for FY11-12.
• Eliminate 250 vacant positions in DHHS Central Management and Support Division (CMS): 250 job positions in the CMS Division remain unfilled, yet the state appropriates millions to CMS for these unused positions. This reduction of $6.5 million allows CMS to keep the status quo while adjusting budgetary allotments to remove funding for unfilled positions.

House Republicans have the unenviable position of being the first legislative chamber to attempt to reconcile a massive budget shortfall. The preliminary proposals indicate the House is attempting to diffuse the budget crunch across all areas of government to lessen the impact on individual government entities. Republican’s insistence against tax increases on the public have necessitated an inward focus towards balancing this unwieldy budget.