Legislative Update–5/13/16

May 2016

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Busy week! The House released most of its budget proposal, the bill filing deadline came and went, and lots of lawsuits were filed about HB2. Be forewarned, this is not a short update.

House Bill 2 Lawsuits

Gov. McCrory and the state legislature filed separate lawsuits against the federal government on Monday claiming that HB2 is not discriminatory and should not jeopardize federal funding. On the same day, Attorney General Loretta Lynch announced that the federal government would sue North Carolina to block the enforcement of HB2.

In her speech, Attorney General Lynch described HB2 as “state-sanctioned discrimination” and made a powerful and passionate case for LGBTQ rights. Later in the week, the Obama administration announced that it will not withhold federal funding while the lawsuits play out in court. Lastly, President Obama will issue a directive today to all school districts in the country stating that students must be allowed to use bathrooms that match their gender identity.

House Budget

The House Appropriations Subcommittees presented their budget proposals this week, so we’ve got a very good sense of what will be included in the final House budget proposal next week. Below are summaries of the subcommittee proposals.


Click here for a link to the special provisions.
Click here for a link to the money report.

A couple of general notes on the education budget:

  • It frequently uses nonrecurring funds for recurring expenses.
  • Teacher raises will be released next week and aren’t included in this subcommittee report.

Literacy Coaches—The budget includes $25M in recurring funding for literacy coaches for the 20% lowest performing elementary schools to help students meet Read to Achieve benchmarks.

Reading Camps—The budget also includes a $20M recurring cut in Read to Achieve reading camps, though $10M in nonrecurring funds is allocated for these camps.

Elimination of Additional 1st Grade Teaching Positions—Last year, the budget included a class size reduction for first grade. This recurring budget cut of $26.9 M eliminates the additional teaching positions to achieve this class size reduction.

Textbooks and Digital Materials–$11.7M in nonrecurring funds is included for the purchase of textbooks and digital content.

Digital Learning Plan–$9.4M in nonrecurring funds is allocated to implement the state’s digital learning plan.

Instructional Supplies–$5 M nonrecurring allocation.

There are a couple of special provisions worth mentioning as well:

  • There is a provision that would change the school performance grading system so that student growth and performance would be considered equally in the formula. The current formula is weighted heavily towards performance, which often punishes schools in poor communities.
  • There is another provision that makes it easier for virtual charter schools to keep their doors open even if students are dropping out at extremely high rates.


Click here for a link to the special provisions.

Click here for a link to the money report.

Division of Child Development and Early Education

NC Pre-K—The budget includes $4M to expand the program by 800 slots. This expansion is included in the governor’s budget. It also replaces $4.3M in state funds with $4.3M in federal funds.

Child Care Subsidy Market Rate Increase—The budget increases the reimbursement rate for child care subsidy in Tier 1 and 2 counties for ages 3-5 with a $3.45M recurring allocation.

Child Care Quality Improvement—The budget allocates $663K for federal block grant funds to speed up the criminal background check process for child care providers and to make other improvements. This item is in the governor’s budget.

Division of Social Services

Child Welfare—After NC’s dismal performance in a recent federal review, the House is proposing a $8.6M allocation to implement an improvement plan. The funding will mostly support staff development and in-home services. However, almost all of the funding is nonrecurring.

County Child Welfare Accountability—There is an additional line in the budget that allocates $700K to improve state oversight of county DSS agencies.

Adoption Assistance—There is a $1M reduction in adoption assistance due to a caseload decrease.

Child Fatality Reviews–$59,150 increase to fund 3 (?) positions to ensure timely child fatality reviews. I’m not sure how that amount of money equals 3 positions.

Eckerd Kids and Caring for Children’s Angel Watch Program—There is a $1.5 M allocation for the Angel Watch program, which provides foster care for non-DSS-involved children whose parents are going through crisis.

Division of Public Health

Office of Minority Health—There is a $1.9M recurring reduction to the grant-making program of this office. According to the budget narrative, funds will be transferred to the Chronic Disease and Injury Prevention Section of DPH.

Children’s Developmental Service Agencies (CDSA’s)—The budget includes a nonrecurring allocation of $1.25M to help offset an anticipated decrease in Medicaid receipts. The Governor’s budget includes $2.5M in recurring funds for the same purpose.

Local Health Departments—The budget includes $8.5M in nonrecurring funds to help offset an anticipated decrease in Medicaid receipts. The Governor’s budget includes $17M in recurring funds for the same purpose.

You Quit, Two Quit—There is $250K in nonrecurring funds for You Quit, Two Quit, a smoking cessation program for pregnant women.

Division of Mental Health, Developmental Disabilities, and Substance Abuse

Governor’s Task Force on Mental Health Reserve—The budget includes a $30M allocation to create a reserve fund for recommendations from the Governor’s Task Force on Mental Health. The funds will be released after the Task Force recommendations are finalized and once the Joint Legislative Oversight Committee on HHS has been consulted.

Funding for LME / MCOs—The budget includes a $30M nonrecurring increase to partially restore last year’s cut.

Division of Medical Assistance

Medicaid Rebase—As in the Governor’s budget, the Medicaid budget is reduced by $318M a result of reduced enrollment and utilization estimates.

Bills on the Move

H1012, Study Allocation of Child Care Subsidies/Waitlist
—This bill directs the Division of Child Development and Early Education (DCDEE) to study the allocation of child care subsidies across the state and the impact of a statewide funding approach on the program. This bill passed the full House this week.


H1013, Study Alignment of CC Services Applications—This bill directs DCDEE to study the feasibility of implementing a statewide application process for all early childhood services, including NC Pre-K, Head Start, and Child Care Subsidies. This bill passed the full House this week.


H1040, Study Costs Associated with NC Pre-K Slots (S800)—This bill is a recommendation of the interim Early Education Subcommittee. It requires DCDEE to study the cost of each NC Pre-K slot in all of their various settings–Head Start, private providers, and public schools. This bill passed the full House this week.


Introduced Bills

H1074, Schools Test for Lead/HS Dropout Pilot Prog.
—This bill would require every public school in the state to test every drinking water outlet for lead. The bill appropriates $10 M to implement the testing. The bill would also establish pilot school districts (Hickory, Newton-Conover, and Rutherford County) for raising the compulsory age of school attendance to 18.


H1080, Achievement School District—This bill establishes an “Achievement School District” (ASD), which will be composed of no more that five elementary schools that received a school performance score in the bottom 10 percent of all elementary schools. Essentially, this bill creates the ASD under the State Board of Education that can take over low-performing schools from local school districts and turn them over to private entities, like non-profit and for-profit charter school operators.


H1086, Refugee Resettlement Act of 2016—This bill allows local governments to request moratoriums on settling refugees. To lift the moratorium, local governments must show that they have adequate capacity in public services. While the refugee issue hasn’t been in the news as of late, there remains a worldwide humanitarian crisis—it’s too bad some would make it more difficult for our state to welcome children fleeing the most dangerous places on earth.

H1087, Medicaid Eligibility Timeliness/Funds
—This important bill requires counties to process Medicaid applications within 45 calendar days of receipt. Since NCFAST came around, we’ve seen babies, children, and expecting mothers waiting months to receive their Medicaid approval, which can have a significant impact on their ability to access timely medical care. The bill also requires DHHS to report back to the legislature on a variety of metrics regarding this issue.

S851, Child Protection and Accountability Act
—Despite its lofty title, this bill would simply appropriate $100,000 to support DHHS as it works to correct the myriad problems in child welfare.

S862, Opportunity Scholarships Forward Funding
—This bill codifies massive growth in the state’s school voucher program over the next ten years. By 2027-28, the size of our voucher program would be quadrupled with an annual budget of $134M.

S867, Protect Students in Schools
—This bill would require all public school teachers to pass a criminal background check.

S873, Access to Affordable College Ed. Act
—This bill includes a number of provisions designed to make college more affordable. It allows students to lock in tuition at the same amount it is set at the beginning of their freshman year. It mandates a reduction in student fees. And, at a set of five UNC schools, requires a reduction in tuition. It’s worth noting that these proposals will be challenging to implement in light of recent budget cuts.