Summary of Child-Related Provisions in the Senate Budget

June 2015

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Summary of Child-Related Provisions in the Senate Budget

For information contact:

Rob Thompson, Policy Director, NC Child


While the Senate’s budget proposal includes a number of positive reforms and funding decisions for children, like extending the age of foster care to 21 and increased funding for the Nurse Family Partnership, it illustrates the difficulty of adequately investing in children with a continuously eroding revenue base. According to the North Carolina Budget and Tax Center, the Senate’s tax plan, which is included in the chamber’s budget proposal, would result in the loss of $951M over the biennium and over $1B annually once it is fully implemented.

With that amount of funding, the Senate could eliminate the child care subsidy waiting list of 31,359 children, maintain funding for teacher assistants, and expand NC Pre-K to serve all low-income four-year-olds in the state.

Access to High-Quality Child Care and Early Education


Market Rate Increase: The budget includes a market rate increase for infant and young toddler child care providers in some rural counties who participate in the child care subsidy program. This means that providers get more money per child, which should help to address the current shortage of high-quality care for infants. This provision is not in the House budget.


Child Care Subsidies: The Senate failed to include two key provisions that were in the House budget that would expand access to high-quality child care. Specifically, Senate budget writers did not increase income eligibility for children in grades K-3 to 200% of the Federal Poverty Level and they did not reinstate the prorated fee for partial day care.

NC Pre-K: The Senate budget would result in the loss of 520 NC Pre-K slots as the budget allocates only $2.3M to replace $5M of nonrecurring funding that expires at the end of the current year. The House budget includes $2.3M in state funding and an additional $2.7M of lottery funding to replace expiring funds.

To Monitor

Smart Start, NC Pre-K, and Child Care Subsidy Merger: The budget directs the Program Evaluation Division to contract with a third party to develop a plan for merging Smart Start, NC Pre-K, and Child Care Subsidies. The plan is required to be complete by March 1, 2016. We believe that a conversation about whether or not this merger is necessary should precede any specific plan to merge the three programs. This provision is not in the House budget.

Children’s Health


Infant Mortality Prevention: The Healthy Babies Bundle, a package that includes the Safe Sleep Campaign, the East Carolina University High-Risk Maternity Clinic, and prematurity prevention programs, is fully funded in the Senate budget. Aside from the ECU High-Risk Clinic, these programs are also funded in the House budget.

The ABLE Act: The Senate budget includes policy provisions and funding for the ABLE Act, which would allow parents of children with disabilities to set up 529 tax-deferred investment accounts to save for the care of children with disabilities. Funding for the ABLE Act is included in the House budget and the policy changes are moving through in a separate bill.

Nurse Family Partnership: The Senate proposes the same level of additional recurring funding, $900K/year, as the House for this evidence-based home visiting program.

Increase Reimbursement Rates for Primary Care Providers: The Senate budget includes a 22% increase in reimbursement rates for Medicaid primary care providers, which is an important step to ensure that primary care physicians continue to see Medicaid recipients. This increase is not included in the House budget.


Funding for Mental Health Treatment: The budget cuts $185M in funding for the agencies (LME/MCOs) that provide mental health services. This funding cut is not included in the House budget.

Wright School Eliminated: The budget also eliminates the Wright School, which provides intensive inpatient services for the highest-need children in the state. The elimination of the Wright School is not in the House budget.

Elimination of Community Care of North Carolina (CCNC): Though this is part of the broader Medicaid reform plan, we believe it is ill-advised to eliminate the state contract with CCNC. CCNC has improved health outcomes for children by enhancing the quality of pediatric care and providing medical homes for pregnant women. CCNC is not eliminated in the House budget.

Eliminates the Office of Minority Health: The Senate budget eliminates the Office of Minority Health and transfers funding to a competitve block grant program aimed at eliminating racial disparities. While the funding remains dedicated to a similar purpose, we believe it is important to maintain an institutional, statewide focus on racial health disparities. This is not included in the House budget.

To Monitor

Medicaid Reform: The Senate budget includes a complete overhaul of Medicaid, which provides health care coverage for over 1 million children statewide. The Senate’s Medicaid plan would do the following:

-Change the current fee-for-service system to a managed care system in which a private managed care company or Provider-Led Entity receives a lump sum to care for a specific patient population.
-Integrate behavioral health with physical health.
-Move oversight of Medicaid and NC Health Choice to a new Health Benefits Authority to be appointed by the Governor, Speaker and President Pro tem.
-Fully implement the new system by August 1, 2017.
-Eliminate Community Care of North Carolina, the state’s highly-successful care coordination program.
-Increase rates to primary care physicians.

Nurturing Homes and Communities


Child Welfare Case Management System: Currently, the state of North Carolina is unable to track children in the child welfare system across county lines, which leads to obvious safety concerns. The Senate budget includes funding for a new case management system ($5.8M in FY16 and $13M in FY17) that is specifically not NCFAST, which has been plagued by problems since its original implementation. This funding is not included in the House budget.

Foster Care through Age 21: The Senate budget would increase the age of foster care to 21, which provides critical support for children in foster care as they move towards independence. This funding is not included in the House budget, but the House has passed legislation extending the age of foster care to 19.

Foster Care Caseload: The Senate budget, like the House budget, includes a $4.5M allocation in FY16 and $7.5M allocation in FY17 to fund an increase in the foster care caseload. While it’s important to adequately fund foster care, we should also be proactive in preventing the abuse and neglect that leads to foster care.

K-12 Public Schools


Class Size Reduction: The Senate budget reduces class size in grades K-3 by one student per teacher in FY16 and two students per teacher in FY17 (for grades 1-3 only). This is funded by an $80M allocation in FY16 and a $192M allocation in FY17. This is not included in the House budget.


Teacher Assistants: Senate budget writers cut 5,289 teacher assistants in FY16 ($57M cut) and 8,592 in FY17 ($166M cut). The House restores funding for teacher assistants.
Textbooks: The Senate budget includes only $29M in new recurring funding for textbooks, which is less than what the House proposed and far lower than pre-2011 levels.

Driver’s Education: The Senate budget includes no funding for driver’s education, and requires that the schools establish fees for the courses. In addition, the Senate asks the Community Colleges Board to study the whole issue, and transfers responsibility for driver’s education to the community colleges in July 2016. Finally, the Senate deletes the driver’s education requirement to apply for a Limited Learner’s Permit at age 15, but increases the hours of required parental supervision before attainment of a Level 2 Provisional License at age 16. The House budget includes $26M in funding for driver’s education and does not include the transfer to the Community College system.


NC Child is a policy advocacy organization that produces research and policy options to promote the health, education, safety and well-being of North Carolina’s children.