2010 Governor’s Education Proposal Spreadsheet

Task Force on Childhood Obesity Commission: Committee Recommendations

Summary

April 19, 2010

Representative Yongue and Senator Purcell- Co-Chairs

Recommendation 1: Expand and Enhance Supplemental Nutrition Assistance Program (SNAP) Education

The Task Force is recommending the Department of Health and Human Services (DHHS) immediately seek the technical assistance available from the United States Department of Agriculture (USDA) and other states to make North Carolina’s SNAP-Ed program the model for the South. They also recommend legislation directing the Department of Health and Human Services to do all of the following:

  • Expand the definition and use of in-kind resources to draw down additional federal funds to expand the SNAP-Ed program in North Carolina;
  • Develop a three-year plan to expand and enhance the SNAP-Ed program;
  • Solicit SNAP-Ed proposals beginning in October 2010 for submission and funding of new local and state programs in April 2011. The proposals should be solicited from across the State and should emphasize social marketing techniques;
  • Study the feasibility of placing the responsibility for the SNAP-Ed program at North Carolina State University and/or North Carolina A&T State University, the land grant institutions; and
  • Report to the Legislative Task Force on Childhood Obesity by September 1, 2011.
  • Draft Bill Proposed.

Recommendation 2: Expand the Capacity of Farmers Markets to Accept Electronic Bank Transfer (EBT) Cards

The Task Force recommends legislation directing the Department of Health and Human Services to seek proposals from qualified vendors to facilitate North Carolina’s farmer’s markets ability to accept EBT cards. Draft Bill Proposed.

Recommendation 3: Preschool Nutrition and Physical Activity

The Task Force recommends legislation directing the Division of Child Development to work with the Child Care Commission to include in the Child Care Rules all of the following:

  • Sugar sweetened beverages shall not be served at Child Care Centers or Homes regulated by the Division of Child Development;
  • Reduced fat milk (skim or 1%) shall be served to children older than two years of age at Child Care Centers or Homes regulated by the Division of Child Development; and
  • Juice shall be limited to a total of four to six ounces per day for children over one year of age at Child Care Centers or Homes regulated by the Division of Child Development.

Draft Bill Proposed.

The Task Force strongly encourages the Division of Child Development and the Division of Public Health to work together to ensure that the regulations governing Child Care and the regulations governing CACFP are not in conflict and support the goal of significantly enhancing the nutrition standards governing facilities serving children.

State Health Plan Meeting Summary: April 22, 2010

The State Health Plan held their final meeting to review the National Health Reform Legislation and the impact of the legislation on the State Health Plan and Employers in NC. They also approved their final report and recommendation.

2010 Health Care Reform: Jack Walker who administers the State Health Plan presented on the key areas of the federal Health Care package.

Insurance Reform:

  • Extends Insurance Coverage to 95% of Americans over the next ten years
  • Establishes high-risk pool until 2014.
  • Establishes individual mandate and employer mandates with less than 50 employees with exceptions.
  • Creates regional/statewide insurance exchanges.
  • Offers reinsurance for employers covering pre-Medicare retirees ages 55-64.
  • Eliminates pre-existing conditions exclusions.
  • Eliminates annual and lifetime limits.
  • Provides free preventive care.
  • Extends dependent age to 26 with no student requirement.

Medicaid Expansion:

  • Expands eligibility to 133% FPL (Federal Poverty Level).
  • Demonstration projects to improve care delivery.

Medicare:

  • Medicare Advantage rate cuts.
  • Allows for providers in Accountable Care Organizations to “share” savings with CMS.
  • Medicare Part D changes.

Quality Improvements:

  • Establishes an Innovation Center to reduce expenditures and improve quality.
  • Various provisions to establish comparative effective and quality research.

Timeline for Health Care Reform and the Impact on the NC State Health Plan

  • June 23, 2010-Temporary re-insurance program for early retirees (funds will be depleted 1-2 years).
  • January 1, 2011– Employers are required to disclose the value of health benefits on W-2IRS forms for 2011 calendar year (LEA administrative costs). CLASS Act will require payroll deduction line for long term care insurance.
  • July 1, 2011-Bans pre-existing conditions exclusion for dependents under the age of 19 (negligible impact). Prohibits lifetime maximums (no impact). Mandates that dependents that are “not eligible for other group coverage” can stay on or join parent’s policies up to age of 26 (State $11-$27 annually).
  • March 23, 2012-New standards for description of covered benefits (State/LEA administrative costs).
  • July 1, 2012-Tax on all Plan enrollment for “Quality Research” (State-$600,000-2013, $1.3 million-2014)
  • January 1, 2013– Caps contribution to Flexible Spending Account at $2,500/year (no impact).
  • July 1, 2013-Employers of 200 or more employees must provide disclosure of all options to all employees and make enrollment for new employees automatic unless the employee refuses (administrative costs).
  • January 1, 2014 OR July 1, 2014-Free Choice Voucher. The law requires the employer who offers coverage to provide employees whose family income is more that 400% of FPL a “Free Choice” voucher if the employee contributions are between 8% and 9.5% of family income and plan coverage is greater than or equal to 60% of the actuarial value (unknown impact). Bans pre-existing conditions exclusion for all individuals (negligible). Bans waiting periods greater than 90 days (no impact). The age 26 rule will drop the requirement for “grandfathered” plans of eligibility for other group plans (negligible impact). Employers are permitted to offer employees penalties/rewards up to 30 percent of the cost of the healthcare program for participation in health programs (NC current law: 20 percent). Establishes state-based Insurance Exchanges. Requires individuals to obtain health care coverage. *Note: The employer may compare the difference between paying the monthly 1/12 of $3,000 penalty for all affected employees, or paying 1/12 of $750 for every full-time employee, whichever is less.
  • July 1, 2014-Requirements to Provide Coverage by employers of 50 or more otherwise pay a penalty. In addition, employers will either pay the penalty or provide a “Free Choice” voucher.
  • January 1, 2017-States are allowed to offer large group coverage through HIE (Health Insurance Exchange).
  • January 1, 2018 or July 1, 2018– Imposes a 40 percent excise tax on high cost health plans that exceed $10,200 for individual and $27,500 for family coverage.

*As of April 22, 2010, both State Health Plan offerings exceed 60 percent of the actuarial value.

Most of the major costs associated with health care reform in NC will occur as administrative costs for employers, including local school systems. The changes could cost the State Health Plan as many as half of their enrollment with members whose earnings are so low they would qualify for subsidy or the Health Insurance Exchange plan. This will drive up the costs per member/per month, which could result in fewer members staying in the system and create a vicious cycle. Each State has the authority to operate its own Health Insurance Exchange program as well as regional HIEs and federal HIEs. An example of the eligibility for a free choice voucher or HIE subsidy was described using a series of questions. A family of four with a household income below between $61,938 and $73,551 can receive a “Free Choice” voucher, and if the family household income falls below $61,938 they are eligible for the HIE subsidy. Most of the issues in the Health Care reform package are not effective until 2014, however there are a number of reforms beginning on/or in six months after the enactment of the laws while the Sate Health Plan requirements become effective no later than July 1, 2011. The NC State Health plan is grandfathered from many of the legislative requirements. Citizens and legal immigrants will be required to pay a penalty if they do not have health insurance. If one doesn’t enroll they pay a penalty of $95 per person or 1% of taxable income in 2014, $325 or 2% in 2015 or $695 or 2.5% 2016. There are some exemptions for individuals who do not file taxes and those for whom the lowest cost plan exceeds 8% of an individual’s income.

There are still many issues to be addressed and rules that have yet to be finalized for the law. If you would like a copy of the handout please contact me.

Blue Ribbon Task Force on the State Health Plan Report to the 2010 Session of the 2009 General Assembly:

The report provided an overview the six meetings held this year and the final recommendation that reads: The Blue Ribbon Task Force on the State Health Plan for Teachers and State Employees recommends that the General Assembly continue addressing State Health Plan issues during the 2010 Session and that the Task Force resume its work after adjournment of the 2010 Session and develop a report to the 2011 General Assembly.

Governor Perdue’s Education Budget Recommendations:

Major Recommendations: Public Education

Career and College – Ready, Set, Go!

Governor Perdue’s budget provides resources to meet individual student needs and to ensure that students graduate prepared for a career, 2-year or 4-year college, or technical training. Major budget recommendations are:

Provide $39 million for diagnostics in grades K-3 and 5 to ensure that basic deficiencies in reading and math are addressed before students move to middle school.

Provide $1.4 million recurring for diagnos tics in reading, writing, science, and math in grades 8 and 11. The State Board of Educa tion shall maximize the use of federal funds to implement an academic boot camp to address basic deficiencies and ensure that students graduate college and career ready.

Implement the funding formula adopted by the State Board of Education for the North Carolina Virtual Public School. This supports an estimated 25% enrollment growth and an average student course enrollment cost of $324.

Provide an LEA flexibility reduction to be allocated based upon average daily member ship. LEAs shall use federal funds, including funds received from the federal recovery act as well as teacher attrition to mitigate this reduction.

Budget $36.6 million in additional lottery receipts to support K-3 class size.

Reduce the central office appropriation by 5% and the assistant principal appropriation by $8.9 million.

Reduce the Department of Public Instruc tion’s budget by $11 million and 36 positions.

CLICK HERE FOR THE COMPLETE BUDGET AND SUPPORTING DOCUMENTS

Gov’s Budget Highlights:

The following is from the Governor’s Communication Desk:

The short session budget adjustments Gov. Perdue announced this morning reflect a state facing continued fiscal challenges. As you know the next few years will be challenging, even though North Carolina’s economy is on the road to recovery.

The governor’s proposed budget prepares North Carolina to take off as the economy improves by recommending strategic investments in creating jobs, ensuring every student graduates high school prepared for success, setting government straight and building safer and healthier communities.

Here are a few of the highlights:

  • $86 million for several key investments in assistance to small businesses and infrastructure that will help create 35,000 jobs over the next three years.
  • $39 million for hand-held technology in grades k-3 and grade 5, so children can get individualized attention before they fall behind in school.
  • Funding to pay back teachers and state employees for the salary reduction taken to balance the FY 2008-09 budget.
  • An initiative to crack down on Medicaid fraud, waste and abuse, which is estimated to save more than $35 million in 2010-11.
  • $8.5 million to provide health insurance to an additional 8,100 children in working families. (OR $10 million to expand the Criminal Justice Law Enforcement Automated Data Services project, which will merge all criminal records into one interactive and comprehensive system.)

These investments will bolster our state’s recovery and help ensure North Carolina emerges from this recession as the best place in the world to live and work.

But the reality is, tough choices pervade this budget. The budget recommends cutting almost $1 billion in spending and more than 600 positions, for a total of more than 15 percent in spending cuts since Gov. Perdue took office. It reduces or eliminates more than 70 programs that are unnecessary or inefficient, saving taxpayers $190 million. And it reserves $100 million to replenish the state’s rainy day fund.

You can find Gov. Perdue’s complete budget recommendations are available online, at http://www.osbm.state.nc.us/.

GOVERNOR RELEASES BUDGET PROPOSAL: Press Release

State of North Carolina

Office of the Governor

20301 Mail Service Center • Raleigh, NC 27699-0301
April 20, 2010
Contact: Chrissy Pearson
Office: (919) 733-5612

Gov. Perdue Releases FY 10-11 Budget Proposal

Features Investments in Jobs, Education, Ethics Reform and Safe Communities, While Cutting Almost $1 Billion in Spending

Raleigh – Gov. Bev Perdue today released her proposed state budget for the 2010-2011 fiscal year. Released earlier than administrations in past years, Perdue’s budget makes critical investments in four key areas: jobs and the economy, education, setting government straight and safer communities. It cuts nearly $1 billion in spending and reallocates some $250 million to programs that will reform state government and continue to move the state forward through an economic recovery.

Spending cuts focused on programs and areas that were proven to be unproductive, wasteful or in need of greater efficiencies. Investments in technology to ferret out fraud, waste and abuse were also highlighted.

Highlights of the budget proposal include:

JobsNOW

  • $15 million for a “Back to Work” Incentive Fund that will provide a direct rebate to small businesses that hire long-term unemployed workers.
  • $250 per person credit for small businesses that provide health insurance to their employees.
  • $22 million to establish the North Carolina Mobility Fund that will be used to address critical congestion bottlenecks and to improve our logistics capabilities.

Career and College – Ready, Set, Go!

  • Protects class sizes for K-3, while giving local school systems the power to manage spending cuts.
  • $39 million to provide teachers with hand-held diagnostic assessment devices in grades K-3 and grade 5.
  • Fully funds enrollment growth and expands need-based financial aid at the university and community college levels.

Setting Government Straight

  • Additional funding for the State Ethics Commission to ensure good government practices including an online personal financial interest disclosure system.
  • Additional funding for the State Board of Elections to support campaign finance software that will improve the ease and reliability of filing, reporting and auditing campaign finance disclosure reports. 
  • $4 million for the Department of Revenue to target corporations that have outstanding tax liabilities.  The initiative is expected to collect an estimated $110 million in additional tax revenue.
  • Gov. Perdue’s crackdown on Medicaid fraud, waste and abuse is estimated to save over $35 million in 2010-11.
  • Reduce spending by $20.5 million by linking inmate medical costs to the Medicare and Medicaid fee schedules.

Safer Communities

  • $10 million to merge state criminal data records into one streamlined, comprehensive system, known as CJ LEADS.
  • Funds to raise probation/parole officer salaries to improve the recruitment and retention of officers.
  • Funding to establish statewide capacity for law enforcement to collect DNA at the time of felony arrests.

The budget also includes almost $1 billion in spending cuts.  That total was achieved through efficiency measures, cutting waste and eliminating unproductive programs. Some cuts include:

Reduce spending for most agencies by 5% to 7%.

  • Education entities protected at less than 4% reductions.
  • More than 600 positions eliminated.

In addition, Gov. Perdue’s budget ensures North Carolina’s financial security by earmarking $101.5 million to replenish the state’s Rainy Day Fund.

JOINT EDUCATION APPROPRIATIONS SUBCOMMITTEE: MEETING SUMMARY

April 12, 2010

Chairman:

Senators Foriest and Stevens

Representatives Glazier, McLawhorn, and Rapp

Joint Meeting with Joint Transportation Appropriations SubCommittee

Representative Cole presiding:

Driver Education Presentation: Paula Collins presented the Continuation Review of the Drivers Education program that was prepared by DPI.  She reviewed the laws regarding the Driver Education program beginning with DOT’s duties as indicated in G.S. 20-11. Next it was NC SBE G.S. 20-88.1 with the SBE being the fiscal agent for the LEAs. G.S. 115C-216 sets out the law relative to LEAs who are to provide training and instruction in the use of state resources. NC DMV-DOT rules include 6 hours of driving experience and 30 hours of classroom instruction. Driver Education must be out of the school day and there is no course credit. Students may pass a proficiency test to waive classroom instruction, but few students take the test and fewer pass it. It is mainly given to out-of-state students coming in to NC. LEAs have the authority to set up their own program some using all internal teachers and other using a combination of contractors and internal resources. The LEAs are responsible for having someone oversee and monitor the program in the district. DPI had four recommendations as part of the review report: 1) Maintain the State Superintendent as the fiscal agent for the highway funds to pay for the program 2) Driver training should remain outside the school day’s instruction 3) Review the delivery process for the program 4) review the driver eligibility certificate program.

Paul Le Sieur, Director, School Business Services, DPI presented the funding portion of the Drivers Education Program told the members each LEA is allocated $238.04 per eligible ninth grade student. The eligible students include private, federal, and charter school students. In 2008-2009 the state budgeted $34.3 million and had $2.5 million in unexpended funds. These funds are transferred once a month to the LEAs. Senator Stevens provided a handout that gave the history of the driver education funds, which were first dedicated funds in 1957 with the addition of $1 to the vehicle license registrations. Through the years another $2 was added. Presently, there are somewhere between 8-9 million registered vehicles in NC, which equates to between $24 million and $27 million in the Highway fund.

Mark Bondo, Fiscal Research prepared the staff response to the Continuation review report completed by DPI. Students must complete a driver education program and have a driver eligibility certificate to get a permit in NC. The driver eligibility certificate (DEC) was a law that passed in the late 90’s to ensure students were making progress toward graduation to be eligible to drive. It was intended to be a carrot, but looks more like a stick. Program expenses across the LEAs range from $275.00/student -$500/students. More than half of the states (32) have no funding for driver education while about 18 are fully/partially funded. There are several problems with the program There are no standards, no class size restrictions, no statewide outcomes, the driver eligibility certificate is not being enforced using the same standard, the DMV computer system is limited in its support of the DEC and there is no lead state agency overseeing the program . Fiscal staff was very critical of driver education program noting there was no empirical data to indicate the driver education program prevented crashes. Four recommendations 1) full study by the program evaluation committee 2) Continue funding until this study is complete 3) Reviewed other funding options for the program 4) cut 2010-2011 funding $1.15 million. It was noted the actual per student cost had been decreased over the years from a high of more than $250.00 per student. Representative Cole wants these funds left in the Highway fund and insists Driver Education should be paid for in the Education appropriations.  The issue is it is getting late in the fiscal year to take the funding provided through the license registrations and eliminate it, and require Education appropriations to find the new resources. The plan appears to be to require a better study from the program evaluation division and based on their recommendations make some decisions for as early as 2011-2012.

Education Agencies’ Budget Reduction Options: Philip Price, Chief Financial Officer for DPI presented the public school’s budget options. The Governor’s office requested a recommendation for an additional three percent cut to the public schools budget. A three percent cut is $214,118,273, based on the 2010-2011 base budget for public schools. This cut does not include the continuation adjustment cut of $4,845,504 or the annual average salary adjustment (reversion 2009-2010) of $44,950,676. Based on the cuts in the 2010-2011 budget the only area in the budget with sufficient resources, that was agreed upon by the Office of State Budget and Management, was the teacher assistant’s allotment. If this allotment is cut by three percent, it would mean the loss of 7,389 TA positions (41.77 percent of total funding).  A three percent cut to More at Four would reduce their funding by $2,421,461. A three percent reduction to DPI would require $2,895,486 and this amount would require cuts to DPI, Teacher Academy, NCCAT, Dropout Grants and the Non-Profits.  Philip noted the reversions from the public school fund are expected to be $64 million this year, which is less than the 1 percent usually projected. Questions were raised about the higher than anticipated salary adjustment of $44,950,676, which usually amounts to about $30 million. Members pressed him on which grade level TAs should be cut and he indicated it was just a cut with no direction on the grade levels. If the teacher assistant allotment is reduced by $214 million, LEAs will still have the flexibility to move funds between allotments to hire Teacher Assistants.

Jeff Davies, UNC General Administration came and discussed the harm in making further cuts, but provided no specific information to the committee through a handout.

Scott Ralls, President of the Community College System presented his recommendation for a three percent cut as requested by the Governor. The reduction of $28.6 million was made by requesting a two percent management flexibility cut and allow each community college to determine the cuts from their area. He also requested a $3 per credit hour tuition increase with 25 percent of the funds going to need-based financial aid to make up the remaining cut.

There was very little discussion though the Chairman requested the University to provide their specific cut recommendation by Friday.

State Budget Calendar: Governor’s Budget April 21, Joint Subcommittees Report April 23

Senate Passes Budget May 28, House Passes Budget June 10,Adopt Conference Report Budget June 29

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