Collateral damage

At their January meeting The UNC Board of Governors lamented problems resulting from not having a state budget. Without pointing fingers of blame they urged Governor Cooper and the legislature to “move swiftly to approve the budget that funds nearly $800 million in key education projects.” UNC President Bill Roper pleaded with state leaders not to make the UNC System collateral damage in this year’s political standoff.

At some level all 10 million of us are collateral damage. Everyone is impacted by the state budget. Fortunately, our state laws require that absent a new budget the most recently enacted spending plan remains in place. The good news is that the budget passed initially in 2017 and amended in the 2018 short session is in place and no government shutdown will occur. The bad news is that it doesn’t reflect 2020 needs and isn’t good governance. 

Space won’t permit all those harmed, but one significant impact must be noted. Our legislature passed Medicaid reforms in 2015, the biggest overhaul of Medicaid since it was first begun. Managed Care, where Medicaid payments are made monthly based on a per person or capitated amount instead of the traditional fee-for-service payment, was due to go into effect early this year. The reforms involved many months of design, a lengthy approval process from Washington and an extensive bidding competition last year to choose Managed Care Organizations (MCO) to oversee recipient care. Major policy and operational changes were required and the state hired outside contractors, at costs in the millions, to help write and coordinate the new systems.

But the money ran out. The Department of Health and Human Services repeatedly told lawmakers there wasn’t enough funding to get Medicaid reforms operational. Not to worry, officials were told, the needed funding would be in the 2019 budget – you know, the one never passed. Contracts were halted; many contractors moved on to other engagements. Some of their work can be picked up and continued, but parts will have to begin anew. Current estimates are that Medicaid reform won’t likely be implemented until next year. We will have wasted many months and taxpayers will have spent millions of dollars because of needless budget fights. 

Medicaid reform, along with other projects, will ultimately be funded. But when? The legislature is set to convene in late April for the “short session.” Let’s assume for a moment the budget stalemate can be resolved between now and then, something that currently appears unlikely. Any such agreement would involve some “tweaking” of the budget never enacted. That requires time and it’s not far-fetched to see May turning into June and, with a new fiscal year due to begin July 1, we can even foresee a movement to scrap the 2019 budget altogether, in favor of a new spending plan for the new fiscal year. 

No one who has followed state government could ever have imagined a scenario reminiscent of federal Congressional budget battles. We are tired of the finger pointing and blame games. At this point it really doesn’t matter whose fault it is. We need to end this childish standoff. It is impossible to believe that reasonable people cannot not find a resolution, but first politicians need to stop playing to their tribes and start acting like statesmen. 

Maybe we’ve got the wrong leaders.