Still no budget from North Carolina lawmakers

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Leaders say they won?t make an August 14 deadline ? leaving many programs that rely on state funding in limbo

Did you know that North Carolina could run out of money in two weeks?

Seriously. That could happen. The state could find itself with no budget and no "continuing resolution" as it's called (read: temporary budget) on August 15 and if that happens, the government will shut down.

"There's still time to do it by the 14th but it only happens if people roll up their sleeves," said State Budget Director Lee Roberts.

"There is a broad consensus in the House and Senate and between Republicans and Democrats that [a shutdown] would be undesirable and therefore I do not expect it to happen," Roberts said.


What if it does?

"If it does, I think what happens is something like a state holiday," Roberts said.

Just in case, Roberts has asked every state agency and department to submit proposals for how they would handle a shutdown.

"We just wanted to make sure we were prepared. As we were coming up to the fiscal year, we realized that our plans could be a little better, a little more robust, when it comes to having good contingency plans in place in the event of a shutdown," he said.

Roberts explained most agencies have turned in their proposals. He's now in the process of consolidating them into one unified plan.

"We obviously have until the 14th under the current continuing resolution," Roberts said. "That's enough time to get the budget wrapped up. We're one of only five states where the state legislature has not completed its budget process."

"We think it's time for the legislature to do what the people sent them here to do: wrap up the budget work for the session," he offered.

That's easier said than done. By most accounts, the House and Senate are still miles apart on key issues ranging from taxes and spending to education and Medicaid.

"This is the classic budget impasse," said Meredith College Political Science professor David McLennan.

McLennan said a big part of the problem is that the Senate has embedded a number of major policy positions in the budget that the House doesn't want to include.

The Senate wants to reduce class sizes and cut thousands of teacher assistants. The House does not.

The Senate wants to remove Medicaid from the Department of Health and Human Services. The House does not.

The Senate wants to include major tax changes in the budget. The House does not.

The Senate wants to redistribute the state's revenue around the Tar Heel State differently, allotting more money to more rural counties. Again....... well, you get the picture.

"These are not small, 'let's solve it in an afternoon' kind of policy differences," said McLennan. "These are differences that could take weeks or months; they've had hearings on some of these policy issues, bringing in experts from outside the state to talk about how complicated it is. So these things are not easily resolved."

What's more, the Senate and House aren't in agreement over the basic question of how much to spend next year. The Senate wants a 1.8% increase in spending; the House wants a 5.1% hike.

"That's hundreds of millions of dollars apart and that's just not easily resolved," said McLennan.

And as of yesterday, the two sides haven't even started talking seriously. The appropriations heads (the people in the House and Senate charged with taking the lead on a compromise bill) haven't even met yet.

"Given that we have Republicans in control of both chambers and the governorship, you would think that this would move along. June 30th is not an unreasonable expectation for putting together a budget but here we are close to August and we're not really that close," said McLennan.

Before the last two-year budget ran out on June 30, lawmakers approved a 45 day "continuing resolution," or CR, to keep the lights on while they worked out their differences.

"Everyone said, 'let's make it a little longer than we need to to get it done,'" said McLennan. "But then we had some vacation time and no meetings, no sense of real priority attached to the budget. At least, that's what it looks like from the outside."

"People in North Carolina need some of these budget questions answered," McLennan continued. "Teachers, principals, people who provide medical services, even transportation is a huge part of this."

The Governor has spent the past three months feverishly touring the state getting support for a $1.4 billion transportation bond, but the Senate doesn't want to borrow the money and has included transportation funding in its version of the budget.

Roberts says the two sides have to find common ground on what can and can't be solved in the budget.

"We can't go through another fiscal year without coming up with a solution for teacher assistants," Roberts said. "Whichever way that solution goes, there needs to be an answer for the school districts on teacher assistants. That's not true for Medicaid reform. Medicaid reform does not necessarily have to be part of the budget."

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