by Sarah Curry
Director of Fiscal Policy Studies
Really the budget debate comes down to two major components: what Medicaid is going to cost and how much money will be left over for a teacher pay raise. Lawmakers must have a clear picture of Medicaid’s financial requirements before any other budget negotiations can take place.
Medicaid is the largest expenditure in state government. Last fiscal year Medicaid made up 20 percent of the General Fund and 69 percent of HHS spending. Due to the Affordable Care Act, there have been federally mandated changes that increase costs as well as the complication of the program, which is funded through a mix of state dollars and federal matching funds. Legislators want to give teachers a salary increase, but before they can spend more money in that area, they must determine the amount necessary for Medicaid.
Here are multiple factors that affect the funding amount for Medicaid:
All these things combined have given fiscal analysts different numbers on which to base a budget. Medicaid is a very complicated government program and one that is causing many states difficulty, not just North Carolina. So before lawmakers go home from Raleigh, they need to find an agreement on Medicaid and how much it will cost in the budget. No other budget negotiations can be taken seriously until the largest part of the budget, Medicaid, is agreed upon – including a teacher pay raise.