Gov. Perdue is calling for a back-up budget plan to be drafted in case federal Medicaid dollars don’t materialize.
Congress could blow a $500 million hole in the $18.9 billion state budget that legislators have worked on for months, adding more uncertainty to funding plans for public agencies and schools.
The $500 million question mark – beefed-up federal Medicaid payments that could stop by the year’s end – may lead to more state budget cuts in a year that started with budget writers working to compensate for an $800 million revenue shortfall.
The state has a few ways it can plan for less.
Gov. Bev Perdue wants the legislature to prepare a supplemental budget in case the $500 million does not arrive.
This raises a couple of questions: will the back-up budget be made public so we can see where lawmakers found another $500 million in cuts? And if they can find another $500 million to cut, why not go ahead and make the cuts even if the feds do approve the extra Medicaid money?
After all, North Carolina is setting itself up for a nearly $3 billion structural deficit for next year’s budget, why not begin to mitigate that now?