Good morning everyone. Members if you would please take your seats and we'll get started. I want to welcome you to the appropriations budget meeting. A lot especially our page this morning. I want to cover a few things, I want to go over pages this morning, and as a call name and if I miss pronouncing it, I apologize immediately but if you will stand if I call out your name. Isabella Manhashki. Isabel there we go. She is from Fredericksburg, Virginia, Senator Curtis. Campebell Blackburn from Clayton North Carolina Senator Newton. Harris Steg from Anderson North Carolina Senator Apodaca innocent bill I would assume. Where's Olly? There we are, okay. Stephan is a scuffle from Goldsberg Senator Bait, Camrin Clark form Burlington Senator Gunn Catherine Cork form Burlington Senator Gunn, Ramsey [xx] from of North Carolina Senator Bingham, Evan Graham from Rally North Carolina Senator Alexandra, Drew Morgan Meghan I can't read the writing here from Wellington Senator Lee. Good morning. And Evan-burg form Eddington North Carolina Senator Tucker good morning. the head girl with us today. Our sergeant at arms this morning is Terry Bernard, Marcus Kilt Paul [xx] Donald Blink bright excuse me Danam[sp?] I did not to [xx] Jim Harmaton, Lary Charles Marsalis, Ed Kessler and [xx] We appreciate all, you all do forces layoffs keep us in order keeps us in line. I would like to go over the rules a little bit this morning with you. If you are going to have some amendments what we are going to do is that senator Brown will present the over view of bill and then we will ask the sub committee is to come back and I will call on you in the pretty much in order as they are in the badges if you have amendments they have to be to the chair by 10 o'clock and I will remind you a couple of time as we go through the process this morning many can be transferred among others we did the same within same committee section amendments for many as being transferred among items within the sub-committee must clearly identify the items programs that are being increased and or decreased none recurring reductions can not be made to than recurring additions. Amendment suspend portions are allowed, amendments that increase or create new mention of flexibility reserves are not allowed. Amendments that increase spending in the sub-committee budgets are not allowed, amendments are not allowed for funding for an Alarm[sp?] camp[sp?] from state wide reserves. Amendments that are just funds from compensations increase reserves or other reserves related to salary or benefits are not allowed. Amendments that are just funds for workers compensation are not allowed. Amendments that are just funds related to vacant positions are not allowed. Since this is a meeting of full appropriations amendments that address finance portions of the bill will not be heard. Amendments must be in writing the regional signed with 100 copies available for distribution. And as I said earlier to be considered a opposed amendment must have have been logged in by the committee clerk in room 643 by 10 am this morning. And with that I will introduce Senator Henry Brown to bring us the overview of the senate budget. Senator Brown. Thank you, Mr. Chairman I'll try to touch on just some highlights and then I'll turning over to the sub-committee chairs that hit there to take on several areas and are also touch on some salary basis as well The Senate is proposing a balanced a budget that protects the state long term physical health, smartly invest in public education, and core priorities cuts taxes and supports jobs growth and economic development statewide. With prudent and overall increase of about 3%, a 21.47 billion dollar plan keeps states governments spending in line with the population growth and inflation and comes within less than a quarter percent of the governors proposal. found that responsible budgeting decisions, major tax reforms and historic tax cuts, North Carolina is expected to have a $400
million surplus in this years budget. our proposal uses the additional dollars to help show up rainy day and repair renovation fans by $800 million and deliver broad tax relief to North Carolina families and businesses that help grow the state's economy, reducing the personal income tax with more than $3 billion over the next five years alone. It also makes good on repeating promises from state leaders of both parties that end to transfer of hundreds of millions of dollars from the highway fund to the general fund and ensure that money is finally spend on building and maintaining safe roads and bridges. Our plan also takes significant steps to ensure highly qualified teachers are at the head of every classroom in the state, a measure proven to take the greatest positive impact on students achievement. It offers an average 4% pay raise to public school teachers and fulfills the commitment to increase starting teacher pay to $35, 000 making North Carolina regional leader and far more attracted to those considering the profession. And it increases finding for classroom teacher positions by more than $270 million of the bianium to reduce class sizes and kindergartens to 1-17 and in grades 1-3 to 1 to 15 Teacher-student ratio a level researchers repeatedly shown is key to academic success in early grades. You also find the senate apprehensive plan, makes North Carolina more competitive for new jobs and lays the ground work for reforming the state's broken medicate program, expect us to keep our promises and maintain the budgeting and spending discipline and commitment to pro-growth tax reforms that help give us a 400 million surplus this year. Our structurally sound sustainable budget does just that by setting priorities, living within our means and taking steps like North Carolinian's keep more of their own money. With that I'll touch on the salaries that benefits this all, the government employees lead in providing targeted market base pay to attract and repay highly effective state employees. We have a large amount of money to do some of the targets. we feel the general assembly commitment to increase starting teachers salaries to $35000 are overstepping increase to teachers, assistant principals and principals and ensure that all classroom teachers salaries are paid from through recurring dollars. and we'll get into that a little later. We provide 2.3 million each year to raise pay for community college and structures that equates to about a 6% pay rise for them. Offers a step increase for state highway patrol troopers, clerks and magistrates. Invest more than 38 million over two years appears to do salaries for correctional officers and a then few half points I'll touch on is the budget supports North Carolina military and veterans by in the governor's recommendations to establish a more efficient state department of military and veterans affairs and providing close to 1.7 million to support military installations. it also provides funding to implement the achieving a better life experience act to help disabled children and their parents save money to meet the cost of their disability and it adopts the Governor's proposal to create the Department of Information Technology which is expected to save 30 million dollar over the biennium by reducing duplicate spending and increasing consolidation. With that Mr. Chairman I will let you call on our sub committee chairs Thank you Senator Brown. At this time, if you would hold when the sub chairs come through just hold all your questions till the end, there'll be plenty of time for questions and answer session, but at this time I'll call on Senator Chad Barefoot to do our education. Okay No Senator Suche[sp?, okay let me here Senator Suche[sp?] welcome Senator Barefoot is out producing another public school student in the next five years. Alright well thank you Thank you Mr. Chair. let me hit a little bit of the big picture when we look at our education philosophy in this budget. Big picture, important items are we are increasing the funding for K12 public schools by 453 million for community colleges by 5 million and for University of North Carolina system by 160 million all this over the biennium. It fully funds in roman growth in K12 community colleges and universities that kind of sets
the basis for where we're moving off of. An important thing is this quantifies into law the [xx] court rulings. It affirms that every child in the state has constitutional right to the opportunity to receive a sound basic education. We're also providing $58 million for textbooks and digital resources over the two years, we'll also allocate additional 12 million to fully fund requirements for the Excellence Public Schools Act. We increase the support for opportunity scholarships by 7 million a year, and provide in state tuition for our veterans at the State Community Colleges, Universities and increase funding for The National Guard [xx] the system's program. Now, we'll head over and start going through a little bit more details on the K 12 section of the budget. The key item in the beginning was fulfilling our promise we set out a couple of years back to raise starting teachers salaries that is in the budget to go up to $35, 000 a year for teachers salaries, and line five is fully funding ADM growth. And continuing on another important distinction we have in this budget here is as, we're funding all of our teachers with general fund money. And not using lottery funds will have a recurring general fund money. That sets a what our priority is, and one of the basic things we do on our budget is, that's when the money comes in, that's when the money goes out and it's less it's much more certain that way. So you see some of the numbers, especially lines categories 8-9, that's making sure from the past where we were using lottery funds or certain things that were getting taking money and transferring back and forth so that it cleans it up so our teachers are funded by general funds We look at items 11 and 12. This is a clear policy that we're stating we look at teachers assistants reduced funding and class reduction size. There's more money spend on class reduction sizes. This to our principle that the most thing that you could do is have a quality teacher in the classroom. We thought money would be better spend on the education of our children by having higher quality teachers, as illustrated by starting paying for our teachers and having smaller class sizes rather than teacher sits in the classroom. So this has our priority here when you look at class size spending 80 million in the first year, 192 million in the second year of course with corresponding slightly less reduction teacher assistants. And if you look down section 12 it will give you a little idea of what those class sites reductions are funded and look like in a little bit. Section 13 are textbooks and digital resources there's going to be a special provision that changes the title from text box to textbooks and digital resources. There's a little confusion on this, but it doesn't do anything other than change the title because those resourse for education that replace a lot of the text book purposes, in previous session law had already been allowed, let's just change the title so it's a little more clear, we look at text books and digital resources, not to buy hardware, but to buy the software and resources that is civil equivalent purpose of a text book. When you look at low world supplemental funding and transportation funding you see reductions, those are just adjustments due to whether be fuel costs, or just change in dynamics, not in actual reduction in funding, just a adjustment because the funds require to do the same thing were last this year, and line 17 ADM contingency reserve is important because that is put a transition to the baritual[sp?] charge schools that money was needed to continue that way, and that is basically it for K-12. Thank you Senator Lugar, appreciate that report. Aright. We'll just title the question. Alright, do you want to start with K-12 or you want to go right through it? Aright we'll touch now on community colleges, once again ADM is fully funded, line 23, this was a set aside for one of the critical things that we saw and we got from the community college system was as we move out of the great recession into a growing economy, it's tougher for some of the key faculty on our comunicologies be retained. If you're teaching nursing or teaching welding the demands in the public sector to grab that instructor with those skills to take a job in public sector to make more money is difficult, so it's difficult to keep the quality structure in place so we can continue to train the workforce. So when you've given some salary increase and flexibility so they can find those critical hard to staff items and those salaries and work towards not a complete funding of what they'd asked for, that rarely ever happens, but this gives them some money to be able to work in those areas to continue to have this critical workforce development issues to be addressed. Got enrollment growth line 24 the reason why that's down is because community college tendencies
down that normally happens as the economy starts speeding up so that's not reduction in growth but rather than adjustment to the actual projected tendency. We have, on line 26 was following the governor's budget is $4 per credit hour increase in tuition and that money continues to be invested in community college system. Other key items here. You'll see this in the community college was worth the university system budget when you look at Yellow Ribbon Program, and tuition for certain resident veterans. We're bouncing back and forth as the federal government changes their policy, funds this, requires that, we're trying to continue to take care of our veterans to great asset they are with their service to our country, but also the future service to our state having them trained in the workforce, and so you see those adjustments and that is just continuing with our basic policy of funding institution for our veterans at both those levels by having to adjust as the federal government changes policies especially with different types of art you see scholarships or GI Bills to make sure that those veterans continue to the service that they need with the finances they get. Let's hop over to the university systems budget Let's turn to line 38, we have the enrolment growth adjustment like we have in the past an item that we'll hear about, but is significant, is the margin of flexibility reduction as always that's always a concern when you look at those items, but there are a couple of other areas that we thought were important and the university system continues to ask for the flexibility to be able to make those decisions throughput their system rather than have targeted cuts and I think that those are the major item when you look at that again to the veterans assistance programs those are major items we have in the university system covers the basic philosophy do we have any additional, do we want ask any well we are going hold to the end after it gets through all subcommittees you any other comment senators who check? No, I think that out lies our education budget. Thank you very much, appreciate that. This time we'll do HHS, Senator Ralph Hise? Senator [xx]. Thank you Mr Chairman and the members of the committee just a few little tweaks DHHS provisions that the have available so uncomfortable [xx] after there that was coming through I'll go through some of the money item provisions and cover some of highlights of provisions as well beginning with item number two we begun with a, this is a governors recommendation eliminating the health [xx] grant that are coming through and allocating the portion those funds directly to the community health centers grant program this are coming through. Item number eight, first policy change we are in stead of using NC FAST for the child welfare case management system we're pulling it out and having them purchase a separate system that will integrate within NC FAST fast looking for an after buy shelf that we think will meet those needs in better operations. We are also providing funding number nine, for the continued funding of the NC Tracks program as well, as this is a programming, there's also some funds in there under number five under NC FAST to continue to the programing calls for water required in this state to allow the eastern band of Turkey, Indians to run their own system as we did in last years budget we've just run into a lot of issues with the programing and that would be about $3.2 million to reprogram the system in order to allow that to occur. Number 10 we are creating the state's health information exchange, we are not going to continue to be have an outsider operation threatening the bankruptcy and others were going to develop our own HIE in-house, we have a very type timeline in order to fully have this implemented as we go through, it is our expectation that
all medicate providers will be enrolled and on this system by July 1st, 2017, which will connect all medical records in the state to one central database can be transferred back and forth between facilities. Item 15 we've also placed $450, 000 a year in the budget in a recurring manner so that we continue each year to have the officers of state placed They are ordered to perform financial audit of the department. Item 18 we have about 7.8- 50 million to complete the department of justice requirements that we expend the services and others community based setting and continue to try and find people in institution care can be serviced better in community settings. Item 19 and 20 on page G3 we have a long list of programs there that we are going toajustificational review that means that we will place their funding for this year on a non-recurring basis and we set up a reserve account with that amount of funding in them so that next year the funding is available, but we will be making choices as to whether this is to programs meet our evidence based requirements that we put forward and we are giving them an opportunity in the program review to show that. I'll move to some of the provisions that I'll just mention real quick, the funding for improving children's health and establishing the competitive Block Grants on page 111 through 113 pertaining your provisions, all those oversight managements of the state well the health information exchange, fairly large covers pages 115 to 124. I also move to item number 22, this is the movements of funds for prepay, we have over all what this chosen funds moving in and out from black grands and others, the biggest change to prepay is we heard about the running on about five million in nonrecurring funds we've been able to restore part of that and get about 2.3 million in recurring funds into the program in addition to the full operations all those were coming in. child care subsidies we have one of the provisions in is that we did eliminate the requirement of grandparent income to be counted towards house holding camp, some problems ames in with that policy and others which was moving in children neivasily there is a foster care system so that they receive services so we have eliminated that in the change subsidy as whole with exception of that we also have been created for tie one and tie two counties, we will now pay for market raids for agent zero one and two as we focus on early childhood and need it is we feel like this was the best area that we can invest those funds. And there's a lot of provisions for those, childcare subsidize rates is on page 133, the allocation formula 135 to 136 I will also say that in the provisions page 137 to 139, we also put caps on the amount of the funding that will be spent on administration tighten those up and we've increased what we're asking what local partnerships to do and fundraising. I would say the increase is in the requirements of fundraising raising which will get them to a total of 19% or less than the amount they fund raised last fiscal year. So this is just a matter of keeping them with those new standards of they have been as they move forward. Adams, 31 and to 31 is what we expect to be the increase case load, foster care children and puts the recurring funds to do that. Adam 32 we're in the following provisions, we are expanding foster care through the senate budget up to age 21. We've heard a lot about this in our education and others that was coming through and no longer are we going to be cutting individuals off at 18, we've made a lot of changes to the foster care system and we think it's a program that can continue to support children after they've reached the age of 18. Item 37 that you will see in here, this is an elimination of the office of the minority help particularly the
programs are in there, the officer of minority health had a an excess of 20% of it spam is going to adjust the administration of grands and offices and operations we've instead taking the full amount of those grands. Those grants the $3.4 million you see here and placed all of that to be available for services through the grant program that is run through the Office of as we are coming in and so, we expect more services to be provided in the State for secretary. The capacity that they have some man [xx] was there to adventure. So, each drug existence there is a changes we expect this more individuals without pre-existing conditions can get their medication cover to private insurance other was some expedience to the quick line as we expect the [xx] has change and I'm 41 same do we For the officer minority help, the physical activity in nutrition branch, that is here we have similarly eliminated those positions. taken all the funding available in that agency and placed it competitive botagram[sp?] process in the secretary's office. We again did not see the need to separated ministrative unit and utilize those funds for administration of grants whom we have that program under the secretary's and could avoid those over costs. 42, 43, 44, I will say 45, 46, 47, 48 all those together. We've made some major changes to the office of medical examiner, particularly shoring up funding. We had a lot of reports last year of problems in criminal cases and others that resulted in medical examiners never even showing up to the scene and others. So we have made significant changes, the medical examiner will now receive a fee of of $250 for each one of those. For picking up the body will receive a fee of $200, that's for coming in and most importantly we're now requiring the cost of an autopsy to be paid. Currently counties and states, by others the lowest cost we have an autopsy in the state Mecklenburg County, it's $2800. Counties and others were only paying 1, 200 for each autopsies so they were almost creating a large budget hole that we will have to fill in this operations. So now both the state and others will have to pay the full cost of doing an autopsy which will be $2800. All together this appropriates about $7 million in additional funds through the Office of the Medical Examiner and through their autopsy services, we believe this will go a long way to shoring up those services. We have also item 50 that for coming in there's a competitive bulk grains for local county health departments to improve birth outcomes has been another one of our funding's as well as the nurse family partnership programs. This is something we're putting some additional funds in to expand particularly in areas of Eastern and western rural North Carolina. Thanks for coming in. item 54 provided funds for additional newborn screenings for skilled the severe combined immune deficiencies that's for coming in and we're also 155 provide additional funding funds for the poison control centre, this is something that we have been utilizing for a lot of varying purposes over the years and the funding shortage is something we needed to make up if were going to continue to utilize that. The next item that we will go to is item 57. One of the areas that we looked at pretty extensively and we are surprised by, as we went through the EME MCO's financial statements and others was the tremedous amount of cash that these organizations were setting on, cash that we had seen to be utilized for services and other operations so what we have done in this process is we have reduced their single steam funding for the year for both year of the biennium by 185 million in change each year and we have required them to spend the money we've already paid the previous amounts that so you're in a cash fund is to provide those services out of that for a two year period, the resulting $371 million in saving
As well we're using it as a state to find the transition of medicaid from free for service to decapitate papers. What we expect is that on from July 1st when this changes you immediately have to be able to make per member per month payments, but you will have a backlog and this is information we got from the treasurer of claims that could be submitted under free for service that it could exist for up to 12 months, in that period as of July 1st of this year that amount was in excess of $350 million and state funds are over a billion dollars in total funds that we still owed when we closed that medicaid this year, and we're funding to have funds available for that transitions. Adam 58 for I think this is the fourth year that I've found in the senate budget we have once again recommended closing the scope. Provides very limited service to a limited region of the state and as we try to go through and find funds this is one of the areas. to provide services across the state that we have identified once again. We're provided in 59 the $16.5 million for equipment, for the new brought in hospital, We will not, I'm not necessarily confident that I expect that to open in this fiscal year but due to some legal issues and others that are going on there and if it's not those funds will come back and we'll be required to re-appropriate them next fiscal year and if it was still the best planning decision to put those funds in this time but we did not spend any amounts of trust funds and others from the Dik sales or rather this is direct appropriations. we've given number 60, we've given place an increase into state facilities, and 61 we increase three way psychiatric beds, and 62 we've expanded star teams to provide services for both adults and children. Thanks for coming in. Next I move to quick provision and I will say on page 159 we have created within the mental health trust fund, we have created a set aside specifically for the proceeds from the sales of the Diks[sp?] Hospital, we've put the strongest protection we can put on those funds and that's the requirement that they can only be spent with direct appropriation of the general assembly. If we're going to continue to utilize those funds for the purpose of the property was given, we need to make sure that those were set aside and not lost in our budget process or used for short term needs. We need to make sure those are hailed and can expand services for individuals whose pay bills and that is on page 159. Item 72 shall we go through? These are the expected call savings in the first two years for the elimination of the certificate of need programme you will find on page 167 in your provisions. I will get there in just a second. The three phase out of all the services in certificate of need, we eliminated and face one going to services we felt like now we are not really limited committed by the certificate of need but eliminated by other factors, but there still for each of those still very significant cost in going through this procedure and in phase two and phase three we eliminate the significant of need for all services across the state is a guarentee[sp?] as we move through it so and am[sp?] 71 is the eliminate of the acess North Carolina travel program this was not sure why HHS, but it was not a transfer from the high way funds as we have eliminated those funding so we have eliminated the program and those coming in, 74 these are their funds that we are expecting back the non recurring funds are for the changes in March rate for the time period before certification where the funds reduce in March rate that we are coming in, the recurring funds will be their new fate or represent the new federal mark trade moving forward over a certified system, that's where we are coming in item 75 this is a cub because we've acquired mobile dental screenings, must have dental services contract fordenatl services connected to
them not a lot of point of going out and doing a lot of mobile demo strains and identifying issues such as cavities and others when you have no services to address those issues for those children, we are requiring them to have those contracts in place of planks, before they actually go do mental screens. 77 and 78 are some changes for the pricing skills for specialized drugs for dispensing face performances under the 340 bill program, that where we are coming in. Item 79 this also deals with, the all means MCOs as they we supposed to get up to 15% risk, we were paying an additional 2% payment every year to add to that so they can get to the 15% as we've seen with their cash balance, but not putting funds into that risk reserved, they just been building them in cash and well exceeded the 15% elaborations so we nearly said they went on our transfer that over to that 15% reserve and we will stop paying the 2% in additional payment we pay to allow them to build up a risk reserve item 80 we have gone through many iterations this over the years I've gone here it was legislative intent and last year that we go to one base rate that is not what happened in submitting the plan to the federal government and others so we have merely restated in the most comprehensive way we can, we are languishing the department that we will now have one base rate state for all hospitals as we're coming in we've taken the savings again this year that we'd budgeted previous years but not realized by doing so. Item 81 effective January 1st, contract ends December 31st the state will not renew it's contract with CCNC. What CCNC does in coordinating cares will be inconsistent with our capitulated payment model and where individuals will now receive payments per member per month and manage their own, the care of the patients within, other operations of this is part of that transition, you see the next two items 82 and 83, they were funds for the health department that were passed through funds to CCNC we now dedicated those directly. The funds in CCMC that were going for a larger administration and others as well as the network are now being placed almost exclusively into the rates that primary care doctors and OBGYNs receive for services. We expect this is about a 22.5% increase in the rates that primary care doctors would receive, a 26% increase in OBGYN rates, and it will put all the Medicaid rates for those services up to 100% of the Medicare rates. So we will now be paying the maximum amount for those services allowed on Medicaid. Senator Hise let me interrupt you just a moment please. Members I just want to remind you have less than 45 minutes to submit your amendments, the deadline will be 10 o'clock so, you've got less than 45 minutes at this time. Thank you, continue Senator Hise. Thank you, item 84 you have the expansions of the traumatic brain injury waiver, this is additional funds we've put in to allow additional [xx] in those areas. 85 is for immunizing pharmacist, this is to program to pay pharmacists for doing the immunizations they are allowed to do for Medicaid. Out of 86 this is consistent with the finance portion of the budget that when hospital cost change, as they will would not receiving the sales tax reimbursement. There is a cost allocation of all those cause back through Medicaid, so in State dollars a year, this will be a little more than a million dollars a year that it will of those will cost us the Medicaid dollars, but there is some federal matches to that some hospitals get significantly more in those numbers than they do here. So, when you see it later in, it's cheap as well. Out of item seven, Medicare report, we've put, $5 million $10 a year into the separate health benefits authority to allow it to get up and running and function before we do full transfer of the medicate funds, that will be coming over. Talk about that provision is on pages 76 through 193 we're creating an eight member to oversee the health benefits authority, two of those members appointed by the senate, two of those
members appointed by the house three appointed by the governor, the secretary of HSS will also serve as an ex official non voting member to make up the eight member of board. The governor will select from those members, probably, most likely, one of his appointees. The Chairman of the Board, who will serve as a Cabinet Secretary secretary, coming forward this board will be responsible for all the administration and services with the exception of changes to eligibility which can only be done by the general assembly. Changes in rates, changes in things, changes in operating it will all be set by this agency for the medicaid system. They will be responsible to the budget set by the general assembly so we'd allocate the amount we're spending for medicaid there choices and how they spend those funds or how they're allocated or left to them and as they choose to reduced rates or others that's moving forward to bring them in to budget it's something we think that they can move mid stream and not have to wait on next legislative session to make any changes as we more forward. They will also the new health benefits authority will also not be subject to the state personnel act or its restrictions for positions coming through and all of its employees will serve as at will employees. We're creating a system of three state wide manage care organizations or PLE's and six regional provider led entities that will provide those services within the state that completes summary, I'll be up for any questions as we get there and move forward but that's the medicaid budget in a nutshell Yeah, that was a big nut. Thank you Senator [xx], I appreciate that report this morning. Okay there again members, it's 9:20 your amendments will be due by ten o'clock, don't want you to say I haven't reminded you so if you an amendment you'd like to run make sure we get it before ten o'clock. At this time we'll have [xx] Andrew Brock and as Senator Brock is coming up don't forget to go by around the mall and get your biscuit this morning supplied by Report Council. They will make sure we get that plugged in. Actually now might be a good time to go I get a biscuit. I'd like thank my co-chairs, Senator Wade and Senator Cook and thank our staff Jennifer [xx] and Timothy, and Gel Jeff and Jay Din for Hoping to put this together. The total proposed committee spending for NER this year is 445 million which has a 16.6 above the basis, 4% increase and we spent the money in this way. I'm going to hit the highlights of the budget or we'll be here till the proper clock milk Chugging Contest. In the department of Agriculture on page H2, items 3 and 4 following long and the money report to increase the annual licence fees for prescription drug manufacturers, re-packagers and wholesalers. The Last time the fees were addressed were in 1988, we provide 560, 000 over the biennium to re-educate that industry on the new federal food safety modernization act. This is a very, very big step and with agriculture being our number one business in North Carolina we need to make sure everyone on Ag is educated over the new federal requirement, we also provide $2 million in addition funding in the biennium to support the ever for military purpose to increase. That are there. In the department of labor we eliminated the man en cor-ion inspection division and currently the US department of labor will continue to provide expectations of the morning operations that's on page H6, item number 25 and starting in the dinner section which on page page 11 item 47 or 48, the clean water management trust fund will receive an additional 14.9 million of the biennium, which will $2 million for military buffers and the total funding from all sources will be 46.7 million over the biennium, the Parkson Rick trust fund will receive an additional 5.2 million over the biennium, that brings the total funding from all sources to 31.9 million and also another $500, 000 in non-recurring funded to promote the hundredth anniversary other sate parts, and at some page H12 out of number 56, the budget also supports three initiatives related to the oyster development which include
culture planning oyster sanctuaries and oyster research to develop a North Carolina oyster brew start for both safe totaling this is about $2 million of the biennium page 811 item 49 through 51 provide funding to eliminate the backlog of claims on the noncommercial leaking underground stores tank clean up plan and serves all the state reimbursement from noncommercial tanks effective January August 1st, 2015 that's on page 13 item 61. Moving to item 68 on page 13 we provide an additional $12.2 million in non recurring funds for shallow drift dredging needs brings the total estimated funding for fiscal year 2015 to $16 - $18 million and also provides some additional one million dollars for deep draft dredging needs and throughout this section you'll see where we transfer the zoo, the aquariums, the museum and natural sciences and the park system to the newly renamed Department of Natural and Cultural Resources, and will report to any oil appropriations committee. Going into the commerce section and economic development on page H28, item 84 we meet the current J mark for thebranium on item number 96 on page H29 we provide 6 million in non recurring funding for the North Carolina Small Business Program which will provide grants to early stage technology companies, page H30 item 98 we provide additional funds to support the World Economic Development Grant Program bringing the total annual funding to $17.5 million. Page H30, item 99 we appropriate $2 million in non recurring funding to main street's solutions fund to revitalize downtowns and we also provide an additional $500000 to the High Point Marketing Authority bringing total funding for the authority to 1.2 million annually and provide $6 million and, on one of the North Carolina small business program that's a six million. If you move to special provisions, and look at page 210. The stay in neutral revisions we modify the eligibility requirements number of eligible participants in neutral program. On page 212, Environmental Management of Impaired Legs, we reserve $5 million to the Clean Water Management Trust Fund, a preparation for water party mitigation measures that Jordan for-flake initiate data collection a model of nutrient related water body impairment hierarchically. It also extends the Jordan league demonstration project by two years and delays the implementation of the Jordan lake rule by two years as well. That program we started late so we're trying to give it sometime to run its course. On page 213, clean water management trust fund. The purposes, we have two new purposes to To the trust fund one is water quality, mitigation through use of in water technology and two activity related to the introduction and expansion of selfish population when those activities improves water quality, it also increase primary and secondary funding priorities, on page 215 we incorporate senate bill 160, and my gather think place a new cost of water way is useful, on page 230 we allow dynamic pricing for state fund and attractions and allows dinner DCR and department of to adopt flexible prices for entrance and related activity fees to reflect seasonal variations, special advance and other marketing forces to maximize revenue for those locations including state park, historic sites, museums and our state forest it also exempt the zoos, aquariums state parks, state forest from authority and chapter 158 and say that on page 230, on page 248 we make land fill changes and replace the. Existing permit fees structure for solid waste management facilities with a new permit fees based on an annual permit fee it also extends permit for senator y land fill and transfer station to a facility life aside permit and some page 248, this will cut down on a lot of paperwork and looking at the proposed changes, it should bring an additional 200 $1000 to the department to monitor the land fields. On page two PTA the medication requirements directs dinner to develop a program to increase the
state's ability to utilize private medication bank to satisfy compensatory medication requirements, and this is specifically 30 months after the affected date of the act dinner is addressed to stop accepting fees and lure of medication for streams, wetlands, superior proper's a neutral impasse to be permitted to curb and remove state fear and secure of river basin, and the last dinner to stop at certain fees and lure for all river basins after June 30th, 2018. It will allow the secretaries of commerce and transportation request that DEENA accept fees in lieu of mitigation for projects owned or sponsored by those departments. Again that's on page 258. The next page on page 259, we repeal the sedimentation control commission and transfer responsibilities to the MC and reform civil penalties under Sedimentation Pollution Control Act. This will eliminate the Sedimentation Control Commission and transfer those responsibilities. It also sets the maximum cumulative total civil penalty of $25, 000 for first time violators of the Sedimentation Pollution Control Act. Turning to page 310, the Community Development Block grants will allocate to two primary projects categories. $15.7 million will be for commerce, economic development and 26.7 million for infrastructure. The funds will be provided as grants to local governments. On page 313 the Rural Infrastructure Authority grants directs that all general preparation grand programs to be allocated local governments into tier one, in tier two counties, and this the new part in the world since this tract up tier three Counties. says his track is defined by having a population density of less than 500 people per square mile, and previously this just applied to building and site lease program to change lose of applied to expanded eligibility to the infrastructure category. On page 319 the Industrial Commission Drug Formulary, raised the commission to adopt a drug Formulary that will prove certain prescriptions over the counter drugs and services for treatment of injured workers. They will also authorize the commission to adopt rules to establish an independent review and appeals process for deviation from the formula. That's on page 319. On page 326, the Municipal Service District's Contracts and Referendum Authority requires the city council to approve MSD contract expenditure often creates a process whereby citizen competition, preparation of imestive leading to a referendum upon which majority of votes determines the outcome. Senator Brown speed up the cancer. One more, page 329, the science competitive grant program. Starting in a fiscal year 2016-17, the program is transferred to the Museum of Natural Science and funded $2 million, to be run as competitive grant program where all museums can apply for funding for initial ward shall be reserved for tier one and tier two county at 750, 000 and 600, 000 dollars respectively and that's one page 329 and I'm finished thank you. Thank you Senator Block appreciate that Member you have less than 30 minutes to submit your amendments in less than 30 minutes the deadline is 10 o'clock at this time we hear form JPS Senator Sally Randleman. Senator Randleman. Good morning? Thank you My Chair and let me begin by thanking my co-chair Senator Bingham and also for thanking our staff because they have worked diligently with us over the last few weeks and months. The GPS budget begin is on page one and it provides an additional 44 million for the states criminal justice agencies, first year we increased spending money 1.87%, second year by 1.78%, consistently throughout you will see funding to adjust [xx] compensation. We have funding for training for law enforcement and adult corrections by funding training facilities and appropriate use of force training programs which will include use of force simulator, this would be for all law enforcement and SPI vehicles items 21 and 22 that would be on page four, we are beginning to address some of the mental health needs in the state a prison system by funding 72 additional mental health unit beds at central prison. We established a mental behavioral treatment unit at a close custody prison and
provide additional positions at prison diagnostic centers. Item 27 provide funding to expand the bed capacity for adjudicated juveniles and contracted and state operated facilities, we have a some what have been extended waiting list for this [**] and we are trying them I the appropriate facilities which will also get them out of our communities where they will not be re-offending. Item 33 on page eight, we are including the funding for the private assigned council for [**] offender. Item 10, we are increasing funding for court operations, jury faze and interpreter faze by 4.8 million in our provisions most of them are either bullet point or follow the money, l I will call attention to two or three of those on page 351 we are transferring the office of the in-agent defense services to the administrative office of the court, on page 353 we are requiring the AOC by February 1, 2016 to establish a strategic plan for implementation of its E-court technology initiative however, we have included funding to be followed with in compliance which is ready to roll out and also on page 366 we have a study to develop a faze schedule for private assigned council for energy and defendants this will allow us to better predict what the cost will be and also will help with the expedited trial cases and Mr Chair that concludes my presentation, thank you. Thank you Senator [xx] I appreciate that. This time w're here for the general government, senator Jim Davis, Senator Davis, Good morning, Good morning, thank you Mr. Chairman, members and I would like to thank our coach here Sandra Sanderson and of course our very capable staff, and the general government budget this year, we are going to increased spending by about 1.3 percent the first year and about. 89 percent the second year, while increasing funding that represents some expenditures that we have the first year that we do not have the second year. Because our budget transfers the department of Cultural resources to the preview of the operations committee on natural and economic resources and of cource as directed by our senior chairs we are reflecting the true workers compensation course in our budget. J one you'll find that we establish a department of Military and Veterans affairs, and creates and freinds a department of Military and Veterans by pulling in veterans service programs from the department of administrations. and both filled a vacant positions from the Department of the Administration the Governors office, OSBM and the office of state and Human Resources, and as Senator Brown spoke earlier it provides funding for base closure and realignment support to the tune of about $1.675 million to hopefully it will help us to better serve our veterans, and also get us better prepared to advocate for the continuing funding of our bases in North Carolina. It also funds a new Goldsboro cemetery for two fiscal years after which they will be self supporting once they get some more business there. J 3 office of Administrative hearings it adds of the Administrative law judge in Waynesville. The local government entities responsible for funding T Recurring money and four new positions and those of few in the able actors like the equivalent of five two nine for disabled community and we do not have the expert tee presently, and we don't have access to that with recently established federal program, and we need the expert tee in order to administer those programs. It reduces the operating budget by 2% on number 16, number 17, it provides funding in two positions for the local government units, for government units that are at risk, the state treasury this office has identified quite a few local governments that maybe at risk and they wanted some positions to help head of disastrous occurrence in that local government entities. Number 18 it provides three positions to upgrade and operate the orbit system, we have quite a few people that are scheduled to be retiring within the next
few years and we have to address that. demand, makes technical corrections to the sheets fund, the department of insurance it has the authority an actuary to assist with the captive insurance market which is a growing business in North Carolina and this position will be paid for by funds appropriated and a priority year's budget and this item gives them the authority to create the new positions. Number 22, it puts the state fire protection program transfer under continuation review and this fund versus local fire districts and political subdivisions of the state for providing local fire protections for local fire protections for state owned buildings. Regulatory fund JTN places the a rescue squad worker was a relief funds transfer under continuation review and provides the funding for one more year, it transfers funds to the industrial commissions to pay for services previosly fully funded through fee collections. J12, voluntary rescue, places the voluntary rescue emails grand program transfer under continuation review and provides funding for one more year. Stay board of elections and additional $100, 000 for their continued information on Vivax 25 reduces the operating budget as state board of election by 2% as a result of more online training and efficiencies and that reduction as up to about $117, 000 each year for the brainium. J15 fuzzy annual required contribution for the registration retirement system and J16 transfers two positions from the office of the new department of military and veterans affairs to that entity. Administrative reduction to this office over $110, 000 each year was recommended by the governor crosses the statewide automated fingerprint identification system replacement fund which was not being used. Office of state budget get a management reduces the budget for IT maintenance agreement by 34% to whether actual spending and it transfers, they can position to the new recreated department of nature and veterans affairs. State budget management number 34 provides recurring funds for the challange grand for the North Carolina symphony, previously the $1 1/2 million has been on recurring and in this budget is recurring and it's contained in the form there are raising eight million dollars in private funding. Number 35 provides to the Ever Barrel battle full commission, non profit will assist with the purchase and relocate passion of the shore have we house. Office of state auditor J22 provides a recurring for use of expert witnesses during audit, the auditors officers does not have the expertise in some areas where they are auditing and so this allows them to have contract for those services. Take 23 housing finance agency provides the general fund support for the Workforce Housing Loan Programme and the second this year of the barium and total funding in each year now is $10 million. J24 deferred state aid authorizes the planning state agencies to spend about $2.9 million from the Community Living Housing Fund this money was the unspent balance transferred from the department of HHS as a result of the Department of Justice settlement. Also ptrovides planning for the standard and for settlement to bring total planning for the WHLP to $10 million for each year of the biennium, transfers one number 39 transferred one filled the accounting position to the newly created Department of Military and Veterans Affairs, 40 realigns the budget for illegal services closer to actual expenditure number 42 it transfers to Veterans Affairs Administration out of the department of administration and into the new department, and number 43 funds two architects for the newly created Responsible Capital Planning Commission 44 transfers regarded of some programmed out of the department of administrations and into the new department of military and federal affairs. 45 transfers one vacant position to the newly graded department of military and federal affairs. 46 city Spanish to a line without an expenditure number 47 eliminate the human relations commission 2016-2017. they need an additional $50, 000, whoever it is that they're investigating must be in bad trouble because they need $50, 000 more to find out what you did. J 27, Office of State Human Resources Number 50 provides software licensing funding to create a combined compensation and classification system for State employees. 52, transfers one vacant Human Resources Consultant position to the newly created Department of Military and Veterans Affairs. Let's skip down to J 29, transfers $1.26 million from the e-Commerce Fund to support general availability.
Eliminates in J 31, eliminates the licence to give a trust fund. J 33 Temporary Solutions, it adjusts requirements and receipts to reflect the usage. Department of Revenue, reduces the property planning equipment line items by 24%, that's in number 55.56, funds increase lease payments for field officers 57 provides one new ultra position to address the work load increases, 58 reduces the post-restraint delivery line items by 13 percent. Number 60 allows the department to use receipt funds for maintenance and system hardware upgrades, number 61 provides funding that changes the online payment system from common payment to pay point. J37, project collect tax, provides funding for DOR to enter into a contract with a vendor that will provide tax fraud analysis using GDIT[sp?], and it provides funds for increase least expenses in the field offices. J39 funds maintenance cost for I test and teams, provides funds for an existing contract for the development of a corporate electronic tax filing system. Authorizes DOR to use funds to implement an E-garnishment project, funds the implementation of a new case management system for the collections division, revises the I test budget to reflect the change in authorization to the public private partnership. J 41, the secretary of state number 62 provides worker account planning to align with actuals take 43 the stake controller, places the big and position transfer from the department of transportation under continuation review number 66 provides general fund money to end transfer from a special fund and to the operating budget, J 44 transfer as money from the flexible benefits program accounting general availability, somebody transferred as results of savings [xx] of biker payments and the ends of transfer my special point to the operating budget, and that concludes my report Mr. Chairman. Thank you, sir Davis, member you got hopefully 15 minutes before the deadline for amendments you got approximately 15 minutes, if you have some points get them in. This time we'll here from transportation Senator Bill Rabon. Morning thank you ladies and gentlemen and the Chair pleasure to be here this morning, thank you all and special thanks to the staff for helping us on the transportation budget as you, who did a very good job and we appreciate that, all for your time and all of our efforts. For transportation budget, this time the revenue forecast combine projected revenue for 15, budget is up 7% and for 16 is up 4% due to several notable adjustments of the motor fuel stack the senate bill 20 and in the transfers of the highway fund, from the highway fun to the general fun and DMV fees with inflation. Significant money items are, additional highway fund revenue directed towards mainers and priorities, important modernization, 139 million target structually division, bridges allowing DOT to reduce the numbers of structually efficient bridges by 445 bridges over the by biennium $70 million is injected in pavement preservation to medicate future maintenance requirement 67 million as aimed at improving condition and safety on secondary roads, state wide and 70 million, begins to modernize the roaming to the more head city ports, we continue down sizing up for [xx] by eliminating 853 positions 843 of which have been vacant more than 150 days. We complete the legacy of DMV settles system which is the state automating drivers licence system we increase funding the strategic transportation investments by $334 million and $1.3 billion in the 2016-2025 STIP this adds 520 million dollars in the state wide tear and $390 million to each the regional and divisions tears. Every high way division will have
an additional $28 million over the next 10 years in the division year. Significant provisions are section 29.15 readjust the cap the term bike projects we are moving the cap on the term bike toll projects a DOT can study and develop increasing from nine to 11 the number of toll projects DOT can construct section 29 once have it stabilization of funding for state agency to municipalities this eliminates the statutory air mark of 10.4% of the highway funds motor fuel tax revenue to the aid of municipalities. Funding is increased $147.5 million this year 150 million next year this is necessary due to the decrease in consumption of the motor fuels over time we can see the problem is coming ahead. Section 29.27 rejust the distribution of revenue from the motor fuels exercise tax rates changes in this distributional split are clearly 75%, 25% from the highway fund and the highway trust fund and new split will be 70% to the highway fund and 30% to the high way trust fund it also confirms if their any sections eliminating in the non commercial last program in fiscal year 2016 - 2017. Section 2930 we increased and adjusted the DMV fees. This increase is the DMV fees across the board by an average of 20% and authorized adjustments faced on inflation for every for years. Section, excuse me, section 2932 LPA contract standard increase its licence plate agent compensation rates across the board, establishes a performance incentive and requires the department of motor vehicle to transition LPA contracts to a new standard performance-based format over three years. Lastly section 29.34, adjust the maximum highway use tax imposed on certain motor vehicles. It increases the highway use tax cap on commercial vehicles. $1000 on recreational vehicles, $1500-$2000 it increases the out of state cap from $150 to $200 effective January 1, 2016. These changes generate about $10 million annually for the strategic, Transportation Investment Program. That's the long and the short of it, and I appreciate your listening to me and your support. Thank you Mr. Chairman Thank you Senator Raven. OK at this time you have less than 10 minutes to submit your amendments. that call all visit at 10 O'clock so if you have not submitted yet please make sure you get it up here before 10. This time we'll open up the floor for questions okay, Senator Brocks[sp?] 's got out team if you can do it quickly Thank you, Senator Brock. Thank you, Senator Jackson. This is what everybody has been waiting for and listening all across the world over the internet. The Senate Information Technology budget approaches, the said IT requirements strategically and we're focusing it on consolidation. coordination between our state agency, it create state department of information and technology trans for [xx] and resources to the new organizations. The agency will assume responsibility for managing all aspects of Information Technology for the Executive branch. In the first year, seven agencies will be transferred with the remainder of the cabinet agencies moving the second year. Council estate agencies will also receive their IT support familiar department but take control of their assets and resources. Quickly looking at some of the things in the money report on page N1 the $22 million is for the operation of the new department on page N5. It first to say the infrastructure support is funded at $21 million. First year 20 million, and second they create sufficiency, customer service and provide for additional security in Department of Revenue in a cloud based maintenance management system for DOA and also for the first time it there's recurring funding for the operations of GDAC which is the Government Data Analytic Center which will stabilize the state business intelligence operations and helps us analyze data. The IT internal service fund on N8 which is funded through
agency receipts is allowed to collect 182 million in the first year and 188 the second and they will need a approval from government app to go up 195. On page 23 a special provision the budget requires to completion of the planning document is necessary for the operation of the new department IT enterprise architecture to be completed which will improve the state wide IT system in ERP which is enterprise resource planning system or plan around the state consolidation and management of business functions on base 27, page 28 is the state broadband plan. Page 29 is will allow the state CEO's to develop portal for business operations in North Carolina which provides a one place, one stop shop to access information and support necessary interface between businesses and the state government operations, looking on page 28 we are looking at the implementation two factor authentication the effort for electronic forums and digital signature as continued on page 26 also in page 28 the law enforcement information exchange is expanded also in page 29 agencys are required to use a inner process active directory capability instead of relying on agency specific projects, and those two study requirements, one is for data security, another one is using cloud basic security to operate and modernized operations that are in the state. Thank you Mr. Chairman. Thank you Senator Brock. This time we'll open the floor for questions. Senator Blue. Thank you Mr. Chairman, I have two questions in the Justice and the Public Safety budget and two in Health and Human Services. If I could start with JPS budget, items 41 and 43. On item 41 it's the special Superior Court judges, we're eliminating 3, is funding for these judges Being shifted to districts or are we just eliminating ad reducing the numbers superior court judges. Senator Randleman you want address that. Thank you Mr Chair we are eliminating those special superior court judges. OKay follow up. Follow up. And is that based on the studies by IOC on what the court load is? Because I know the past discussion the past of that was to transfer this specials to the districts that had a greatest need. Mr Chair. May you go ahead Senator Randleman. Thank you, we have discussed that but this time this just eliminates this positions we have increased the number of business court judges, and we have eliminated some of the vacancies or some of the judges, so we're trying to increase more to the business court judges and and this are just three eliminations when this terms expire. Another question in that budget Mr Chair. Yes sir The provision 43 are we Funding federal prosecutors? Mr Chair. Senator Randleman. We are not funding this are actually assistant district attorneys who are helping us get this cases transferred to the federal level for prosecution at the federal level which saves the state money and also allows this people to be housed in federal facility rather than state facilities. Follow up. Yes sir senator, But I want make they are state prosecutors they will be in federal court houses prosecuting federal offenses? They would be acting on getting this cases transferred to the federal level. Thank you Mr Chairman and two in the Human Health and Human Resources. Okay, Senator Hast Yes Senator Hast, I think item 15 in you budget talks about the financial audit in the department. When is the last time those performance audit of their department and did you think about looking at it from that angle building doing a comprehensive performance audit of their department. Senator Rosey. This is not inclusive of performance audit with the financial audit, this the first time we've done that, the one
that came in this year is the first time we've done that in about 25 years as they were coming out, l so kind of one step at a time but this is just to include the financials for the audit to 450, 000. Okay one follow up so that I understand it. On item I had omitted in this budget, I'm trying to figure out exactly what you're doing in for work graduate medical education re-base as they add on, are you now saying that having the medical students, regardless of where they are, will not be figured into the base rate charged by the hospitals and which they operate, so you're eliminating the spending for medical students. Senator Hysic Thank you, Mr. Chairman. Actually, we did that last year when we pass the provisional of general assembly this is the one base trade across the state for all hospitals as is got submitted CMS they thought I can only guess that they thought they meant do two base trade one for regular hospitals and one for [xx] medical what was in the budget last year is bundle of $11 million required us to spend and additional million dollars and then meet any other cuts. So we have rewrite the policy consist with a writing everything else say base trade across the firms after the payment of base traders made each one of those hospitals still get to cost settle their cost for other medicaid recipients and the state facilities and coming in kind of the first in those levels of cost settlement that's coming in for additional dish payments and others that are coming forward so Dominantly this is how much has to put up in the assessment money more than the two change for what they get paid for rates by the time the entire system is finished. One last. Yes my lord, hold on for a second Senator, off course you have one minute left for amendments you got approximately one minute, go on Senator. Yes I understand it though the hospitals with the hospital students basically the medical school where ever they send the it is showing a $12 million reduction in our budget is this reduction to those medical schools or hospitals that train their students? Thank you sir, actually what you will see this is an impact to the entire state of the change of the policy what you will see is that has those funds is complicated process a this funds fall through, the original pay shred would be payed to the hospitals in one road. That might be lower for those who were receiving the gradual medical record additional by shred payment, then later they will consider. for those costs with Medicaid and they will get to the actual costs to providing services. They still every one gets to that baseline. But above that to get to the medical rights they put up a third of that difference, so across the state is this is proportional, you will see this come from hospital across the state in the additional state share of that amount they have to put up in order to get the full maximum amount back from the Federal Government. Okay. Folks the time has expired to submit your amendments, so the amendment deadline is cut off. Other questions? Senator Bryant. Mr. Chair on page 314 in the special provisions, section 15.88 there seems to be a earmark for a downtown development for one of our cities, I was interested in what city that is and what the purpose of that earmark is for, page 314. You have a section. Yeah. Senator Bob, would you like to respond? We are right beside each other, we are looking at areas in North Carolina is made up of a lot of mid-sized cities they don't have that economic growth as in middle or white counties at what we have for rural counties for full in-structural authority, we are also looking at ways of towns that were hit especially hard, but do not qualify for any other type of funding that we have in the state, so we tried to narrowly escape to hit those towns in the middle. Follow Mr. Chair, Well you could have, But this is important to me from a policy stand point because when you look at this provision, it says you municipality had a population on July 213 of not fewer than 105, 000 and
not in excess of 110, I don't mean any harm, but it looks like is one city, so can we just be transparent as to what one city CDC is and how come we are giving a million dollars to one city? Thank you senator Brian senator Wage would you like to respond? Yes thank you Mr Chairman, senator Brian that does refer to half point and they have been to a several times a type of gland or something that might fit in for their middle side city they don't ever qualify for any JDIG they are too large to qualify for the main street below 50, 000, they have a 1, 043, 000 already set aside meaning 430 set aside for revitalization program they've gone through getting everyone on board on the community and they ask for a type of glab it looks like it fit wonderfully under main street we could start with one city and if there is other medium size cities in the next budget we should consider those. Follow up Mr. Chair. Yes senator Brown. I just want to make a statement of course I understand every city has its challenges there are so many things we are doing that are challenging, what our cities have I mean a two or one area our cities are really clubbing main street is limited, I just have a concern about this amount of money going to one particular city in this particular arrangement, thank you. You are welcome senator Brayn, Senator Robin Miller Senator Blake would you like to respond to that comment. Thank you Mr. Chairman I would just like to comment that the million dollars that was already in their is not being touched this was an additional that was put into this program to start helping our middle size cities. Okay Senator Robinson. Thank you Mr. Chair I have several questions first I will start with education on page F2 number 10 low wealth supplementation funding I need some on that in terms of what is the impact of that assessor does not reduce funding to eligible districts but we also know that the low wealth, where is education person, we know that the low wealth counties are also the ones who probably have the largest percentage of those tutors of those schools that are the DNF schools where they were he dint like that I so what is the impact I see senator Soucek over their Yes Mr. Chair I can address that if you like yes senator Soucek Yes great question Sen. Robinson, the low wealth funding formula was designed to go after the great needs it has the formula specifically designed for this type schools to address those issues this doesn't affect the funding in the way you are concerned because it just looked at the formula when you had different types of enrollment change or different local contributions this the formula adjusted according to those numbers without changing the impact it's just if you had fewer number of people you are going to have fewer dollars going there because it's based on ADM, so it's still affecting the same children the same way is just the formula, when you put, plug the numbers and the intention to the form at this time their is just less money needed in order to accomplish that goal. A follow up Mr. Chair. Senator Robinson. Senator Soucek then for those counties would it not be possible thing to adjust so that even though the ADM goes down, that additional funds still are available to them since their schools are greatest impacted, and have the largest percentages of those DNF schools. Senator Soucek, do you have a response? I suppose if you wanted to you could always increase funding for any area of the budget, but this trying to keep the intent of what the low wealth supplemental funding does really hold harmless and have the same impact. Is just adjust the formula, adjust up and down as the needs changes. So it's just addressing the same needs the same way. OK, thank you questions to, yes mum, follow-up, next we go to the next page of reclassified reductions while I do appreciate well I just skipped 11 so I'm making 11 [xx] so well I do appreciate the need for smaller class, the research showed probably 15, 20 years ago, two questions would be, how many of additional teachers are funded per LEA as a result of this change in formula?
Senator Sechanger Can [xx] gill. Do you have that specific data, could you address that please? Please identify yourself. I'd be happy to Mr. Chair. Good morning Brian Madison, Physical research we are behind you Senator Robinson, so we could get you some information on an NLA by ALA basis cumulatively the total additional positions in 2015 and 16 would be 1361 and 2000 16, 17 would be 3, 285 and again will be happy to put together a table for you that has a breakdown by end of the day. Thank you Brian. Thank you Brian. Another question Mr. Pier[sp?]. Yes ma'am. In teacher assistants, how many teacher assistants remain? and what is this actual reduction in number 11. How many are being taken away back and then how many remain? Okay, Senator Suecheck. Sure. Senator Robinson, to address this, a key factor to understand is we fund teachers by position. We don't fund teachers assistants by position. We give a certain dollar amount per 80M and so it doesn't really cut positions. They can still fund as many positions as they want but they have fewer dollar student to do it so, staff can give you an idea of how much money's reduced and how much it costs to fund a TA and therefore you could populate that, but it doesn't cut positions because the LEA's have all the flexibility to spend money how they want including local funding to be on the firmest positions in K3, but it doesn't reduce the amount of money they're going to have to hire people. It's a little complicated but it's important to understand the funding formula. Follow Mr. Speaker. Senator Robinson, you may yes I do and I understand the formula but I also understand that it does eliminate a certain number of teachers, is of staff case you supply that information? and tell me how many will be remaining based on the formula based on the amount of hands available. Brian if would you please. Yes Mr. Chair, Brand Madison again. Senator Robinson, the position reduction or really the equivalent position reduction I think is the senators who check out when we pointed out, it's not a guaranteed position same with teacher's act, first year is 5289, that's a comparison to what's available on 1415 is they are also land refunds available on 1415, 40 A then in the second year and this is not additive on top of 5289, this is the town number 8500, 92 positions in equivalents in the second year the budget so because that reduction is small in year one and year two large in number in the second year and just as we'd fill out with tender two trucks formed about flexibility were not part in this year allies transferred up about 48 million from TAs into other categories, the budget transferred in four million from other categories entity is. Thank you Brian. Senator Robinson, here a follower. Yes, and now the question and thank you Brian and I do understand that they have flexibility but I also understand the limited dollars don't give you a whole landing as well. Let's go over to the university budget, f11 and number 43 I don't know who is hearing this. This is a sue check, soon a sue chen then handle this morning. Okay, and I have already pointed that out. Senator Brown number 43, list of city I do believe that the universe diversity system requested two years for Elizabeth City State, the three million as in for 2015/16 what about 16 and 17. Mr. Chairman I'll handle this one. Yes senator Apodaca. We felt it was better to take a look at it and see how the progression going than just committing money for two year. Next summer when we're here, we can evaluate and see how they've done in the first year and then move forward. OK? Thank you, follow up to Senator Apodaca? Yes Senator Robinson. Yes Senator Apodaca are there specific deliverables that either the University Bond of Governors or this General Assembly is giving you? Elizabeth City so it can know what is being measured by in terms of performance. Yes mum it's my understanding standing, they know the goals they need to achieve and the board of governors will be moderating that, and they'll make a recommendation to us. OK. Any other questions? I have another one, if nobody else has, Go right ahead I'll continue. Go ahead Let's go to HHS senator, where is Senator Dies.
Okay he didn't go anywhere because he knew I had questions, Senator Hice on 88 G21, they called several man for Bidant and we know Bidant had had a lot of issues, tell me, how does the MPEC divide us, it looks like it's additional funds. Senator Hise. That would receive but how will this impact the overall lead and where we divided b in terms of overall problems and terms of funding. This will increase all other state hospital will receive 70% of operation cost for their operation, this will put divide them up to a 100% of those allowable cost barrier will be the highest reimbursed hospital in its time for outpatient cost settlement. Thank you Hise. Senator Robinson, another follow up Yes chair Yes Senator Barrel. If I can just touch on that as well, in divided as for several positions especially for committee and issues they're having there as it relates to the hospital and we try to address all their needs in this particular budget. Senator Page excuse me Thank you Mr chair just to clarify on what senator Hyseen senator Brown in when the board of school of medicine on the 1993 there was an agreement made between the, it was not bided at the time, it was a bit candid on the memorial house but didn't have the agreement was made with the states so that the medical school at Brody could be started, and the agreement was that since there were so many MedicAid patients that they knew they would be seen, they struck this agreement with the previous general assembly at the time to let them have 100% for Medicaid. that agreement was broken a number of years later, just brings it back to a 100% [xx]. Thank you senator [xx], other questions from committee? Senator Davis. Thanks Mr. Chair. I want to come back to the yet to Adam, 11 teacher assistance, just have a probable question I just have. How many currently teacher assistance do we have the state's paying for? Senator Sucahek can you respond? Yeah I guess staff you can look at what they currently refunded but also if you can delineate between what's funded in the general fund this is what was in the recurring dollars versus what was non recurring in lotteries that gives clear pictures to little bit what we are doing here Go ahead, yes sir. Thank you Chris from fiscal research. For the 2014/15 school year there were 15364 state funded TAs, 4447 federally funded and 2604 locally funded TAs, that state number don't have a break out between the general fund portion versus the lottery portion. Versus, also in addition to the TA allotment itself, LEAs have some flexibility to use other allotments most notably children disabilities to also hire a TA. Thank you Chris. Follow up representative Davis. Yes follow up. Could you please remind me exactly we're increasing if I understand correctly the lottery funds in terms of ma-coning, even though we're transferring moving non-instructional support over. What's the additional generated or projected on the revenue of the lottery. Senator Dawn I think it's 37 million but I would refer to senator Brown. it is a piece of lottery 1% can be used to advertising now, this will raise up to 1.5% that generates a little over 30 million there is also and then there's also a new game e-instant game which the first year generates about a little over a million a million and a half second year that I'm trying to remember the number, it may, I think it was the second year. Any other questions from the committee, senator Robinson? I have another one in terms and this is just information, page 106. The UNC need base financial aid can Stab
tell me how much or is there any reduction in the need base aid that goes to the private colleges or what that number is? Okay, Mark if you would respond please Yes, Mark Manu[sp?], physical research. There's no reduction and need base aid to private colleges and universities and I will pull the figure right now. So the base budget which is unchanging in the senate budget is 86 by 86.4 million dollars recurring. Thank you Matt. Any other questions from the committee? Senator [xx] I noticed in the NAR budget [xx] that we have eliminated the limited resource and under-serve communities grant item 97, I was curious as to was there some problem with those grants and again this is another area where capacity building is helpful in our small towns and communities even though we do have rule, the rule development grants which are little more strenuous to apply for and compete for, as I was just curious as to what the thinking was in eliminating those. Senator Brown, would you like to answer your neighbour question? I would like to answer my neighbours question, we had dinner together last night I thought she definitely questions, actually she brought food to the committee when nobody else what we are looking there, as far as reduction was actually to put the money back in the infrastructure areas that way we will be able to have more money going into the projects and have a bigger impact in that area that will help and more jobs and drive the economy so we are looking as far as been more right on target for putting pretty money into these areas that the more money we have than the infrastructure authority the rural infrastructure authority the better ability to put money into those under served areas to make sure to they do clarify for glands and try to get setter servating the money to another area, but have a direct path into helping those areas. OK thank you Senator Brown. Senator Ford, comment, Mr. Chair, comment. Okay. Go ahead, Senator Bryant. I fought hard years ago when we transitioned out of funding a lot of the community base economic organisation they held with capacity building in our undeserved under resource communities and they are while the rule development division does a great job. Even those funds are of a certain robust revel in terms of preparation you have to have a job development, you have to be ready for than a lot of our small areas are still not able to compete for those, but they could compete for the competitive fund. And I just want to make us aware of that. Now I know we're doing some things, with taxes and redistribution, it might try to help some of those areas if that falls flat, this is the a vacuum that we're creating for a lot of these towns, and communities that will not be, they won't be able to compete for the rural development funding. So I just want to make that clear. Thank you Senator Block you raising your hand there? Yes sir thank you Mr. Chairman. What we're trying to do is put the money into the communities and not into positions. It's nice to create a program where you create a job to administer the money, but if we can send the money directly to the communities that have a bigger impact that way, I think that's more important than trying to create a position for rural North Carolina which is actually based in urban North Carolina. So we're trying to put the money into the communities and not into a position in urban areas. OK Senator Ford. Thank you Mr. Chairman, my question has to do with savings, reserves and the statutory requirements verses what's in the budget in addition to the reserves for emergency disaster verses what the statutory requirements are. OK, and what is the question Senator Ford? statutory Is there a difference, and what's the difference between the two? OK, where's our [xx] I'll try to answer. Go ahead senator. It is more than the statutory requirement Senator Ford at 500 million, but I don't think I got to tell anyone that a year, this will get us to 1.15 billion in the Rainy Day Fund, probably still under funded where it needs to be, but I think this is a big step trying to get us what we do need to be. Follow up Mr. Chair. Senator Ford. I respect the answer and the response. I respect the answer and the
response, however, we are very proud here in the General Assembly about the surplus funds and I'm happy for the state as well, but I do believe that we have to prioritize in the saving reserves as well as a Rainy Day Fund for emergency disaster should be a priority and if staff could the answer the question concerning the statutory difference between what is actually been done in the Senate budget, I would appreciate that quantified difference. Okay, Senator Ford, statutorily we should be at 1.6 billion, this will only get us to 1.15 billion. Mr. Chairman. Yes sir Senator Apodaca. I think the records show we're doing a heck of a job digging out of the mess we inherited over neglect for the past item 47 used. I don't know, last 15 years so we're about 100, 000 now. So we're on the way, And thank you Senator Apodaca for that comment. Senator Ford to answer your question, this is by far the highest that's ever been that we've got it close to the statutory requirements that we're working to get it to our statutory requirement as we set law some years ago but prior you and I being here. Mr. Chairman. Senator Blue. Again and I guess I could do it directly to my neighbor but I need to do a counter point. As he talks about the mess that we inherited I just sort of briefly remind him, but sharply remind him that we created the Rainy Day Fund, in fact the earlier the effort created before there was one, and the percentage that was settling was one that was met until more recent history, and it was fully funded at one point Thank you senator [xx], Senator Apodaca Mr. President, I totally agree, when Senator Blue was out of leadership, that's when things went south. Okay, well Senator Apodaca I was going to say, it appears I got Senator Brock and Senator Bryant speaking, so if you and Senator Blue would just carry on, we can get on. Senator Davis, you had a question. Well, I promise I won't address the question to the senator today who is sitting to my left, but Mr. Chair we would like to for a moment just looking at some of these numbers, going back to the TAs again, if we're talking a little over 15, 000 roughly, and with these cuts, and understanding these are not directly tied to direct positions even though they are, indirectly, but we're taking roughly about 14, 000. Can someone explain roughly the logic the mindset of a few remaining positions and what would be of the an end of those? I'll try first and whoever wants to jump in Go ahead Senator Brown. Again Senator Davis there is a lot of flexibility in local level with TAs as you know a lot of money that was supposed to go to TAs locals have decided to spend it to another places already. So some of that flexibility is a obviously they didn't see is important enough to put in the TA slots. Because they've used those moneys otherwise the key piece in this budget I think it's based on the education side is a class size reduction. I think everybody knows if you've looked in any kind of study, if you can get down to 1:15 ratio that is a key number for student learning, and that's what we've done. We've put the money in to more teachers to try to get class size reduced to that majic number that most will agree is key, and for us we just think having that good teacher in that classroom is this most important thing we can do? Follow up. Follow up Senator Davis. So I'm just trying to make sure I'm understanding that so you leave just remnants of dollars behind based on flexibility and they can move those anyway. So, they're just there with the antenna probably not even being used for TAs. Again the locals have that flexibility. OK follow up. Last follow up. Yes Sir follow up. Moving then to the class size question do we cup[sp?] the class size as we are understanding then the intent of 15, or is there still the possibility of LEA's actually slightly over that. Senator Apodaca. We'd through the guidelines much more stringent so that the LEAs cannot abuse the class size and they are limited in why they can go up one on two we tightened that up in
this, because in reality we're going to put 4500 teachers over the next two years, additional teachers in the classroom to handle the size so we are making it more stringent so it's not abused. OK, follow up? With follow up senator Davis, Don Davis Senator Apodaca[sp], so we're still making pathway for an additional one or two. We're listing guidelines in which they can apply to increase that, but we're going to try to keep that to a very a minimum because the lot of times these LEAs see a little money, they'll spend it, so we are trying to keep that. Senator Telmen, your [xx] in here. Mr. Chairman, you have to have some variance on the 15 maximum class size. These students, these teachers are alerted by system and not by schools. You may have an individual school that you have to go over that number a little bit to make work out but the waiver process is being strictly it's going to be much tighter and much stricter and that's what Senator Apodaca was talking about, so you have to have to have a variance you can't just say 15, that's the goal, and you're going to have a pretty good reasons to above that but Senator not am lot in school from there you will have a tremendous number of teachers a lot more than may be needed in the system, that's why that number have to some re way Mr. Chairman Yes sir, Senator [xx] And also Senator Davis, If you look the TA card is less than increase in teacher positions. So we're rely for a more money as the issue, and we just think having that qualified teacher in classroom is just the most important thing we can do. Thanks Senator [xx] Seeing no other question at this time we're going to stand in recess at 11 o'clock to go over the amendments then we will be back here at legislative time at 11 O'clock we stand in recess.