The state House unveiled a $20.3 billion budget Tuesday that includes $50 million to address housing for mentally ill and elderly residents and $250 one-time bonuses for state employees and teachers.
The budget won approval from the main budget committee Tuesday over the objections of some Democrats that the GOP-authored budget should have given more money to local schools and state universities.
The budget now moves to the full House, with votes expected there Wednesday and Thursday before it goes to the Senate.
Local school districts were the biggest winners, with the House adding more than $333 million to compensate for expiring federal stimulus money and erase $74 million in state money the schools were slotted to return to the state treasury next year. The budget gives state employees an extra five days of vacation, but eliminates a $121 million reserve for state employee and teacher performance pay, and deducts $62.3 million from the state contribution to the retirement system. The budget includes no tax or fee increases.
The budget differs significantly from Democratic Gov. Bev Perdues $20.9 billion proposal, which included a 3/4-cent sales tax increase. The House budget committee made few changes to the proposals subcommittees endorsed last week.
House Democrats said the budget written mostly by House Republicans didnt do enough for schools, the university system, public health and state employees. But Republicans praised their work for being fiscally responsible and for attending to the greatest needs.
It only spent what was taken in, as most households in North Carolina do, said Rep. Harold Brubaker, an Asheboro Republican and the chambers chief budget writer. It didnt raise taxes, and it provided the essential services for the people of North Carolina.
The State Employees Association of North Carolina objected to the elimination of the money for merit raises and started running a radio ad in Wake County criticizing the reduction from the pension fund. The pension money should have been used to pay for a 1.9 percent cost of living adjustment for state retirees, SEANC said.
Dana Cope, SEANC executive director, said budget writers were reneging on their promise for state employee pay raises.
Now the House Republicans have made a decision to jettison that position to use the money to backfill education jobs, Cope said. I think there are a lot politics in that.
Housing the mental ill
The budget also includes a new $50 million Transition to Community Living Initiative Fund meant to address the federal governments objections to the state having mentally ill people live in adult homes and to help the adult care homes adapt to changes in how they will be paid.
Responding to a Disability Rights North Carolina complaint, the U.S. Department of Justice found that the state is violating federal law by keeping thousands of mentally ill residents in adult care homes rather than community settings.
The $50 million fund includes $10.3 million that can be used to pay a legal settlement with the federal government, or if there is no settlement, to help pay for housing for mentally ill people, said Rep. Nelson Dollar, a Cary Republican versed in health and human services issues.
The remaining $39.7 million in the fund is to go to adult care homes to help them adapt to new regulations that change how they are paid, Dollar said. To receive Medicaid money, adult care homes have to show their settings offer residents the same freedoms they would have in private homes. The $39.7 million is described as short-term assistance, and Dollar said it is meant to help adult care homes in the first six months of 2013. As it stands, most residents of adult care homes that Medicaid helps pay for would not qualify for funding under the new rules.
The $39.7 million isnt enough to address all the changes adult care homes will face, said Jane Schanzenbach, executive director of the N.C. Association of Long Term Care Facilities.
Vicki Smith, Disability Rights N.C.s executive director, said the $10 million for housing was a good small step, but questioned the larger sum aimed at helping the adult care industry.