NC JUSTICE NEWS: Budget Layoffs + Anti-Health Reform Legislation + Crucial Conversation

July 6, 2011

BUDGET JOB LOSS: The numbers so far

The new state budget only kicked in last Friday, but hundreds of state workers are already feeling its effects. Last week alone, 165 state workers lost their jobs. Since the start of the new fiscal year on July 1, state agencies that report to the NC Office of State Personnel have laid off at least 702 individuals, still a low estimate of the total job losses.

The figure doesn’t factor in staff members from public schools, community colleges and universities, as OSP doesn’t track those employees. Public schools are just beginning to announce cut positions, a number that may prove to be devastating, given that North Carolina is now second to only Utah in the lowest per-pupil funding across the nation. According to Rep. Joe Hackney, the Democratic House leader, school districts have reported at least 2,000 position cuts so far, and more reports have trickled in about custodians, teacher assistants, teachers and assistant principals losing their jobs across the state.

The final job loss numbers will not be evident for some time. Yet it remains clear that the state budget will have far-reaching and long-lasting effects. Analysis by the Budget and Tax Center estimates that the new budget will result in the net loss of 30,000 public- and private-sector jobs over the next two years. Across the board, the budget will damage the state’s economic recovery and undermine years of investment in significant public structures.

MEDICAID DEBATE: Federal cuts would lead to more uninsured in NC

Last week, a group of nonprofits and state leaders wrote to Sen. Kay Hagan, beseeching her to reject federal Medicaid cuts that would have harmful effects on the state’s economy and workforce and result in an increased number of uninsured North Carolinians.

Recently, proposals in Washington have called for billions in cuts over the next decade for North Carolina’s Medicaid program, aimed at shifting money in health costs from the federal government to the state level. These proposals call for converting the Medicaid program into a block grant, setting a cap on federal spending that would lead to deep reductions in Medicaid funding, and rolling back protections for vulnerable North Carolinians.

The federal proposals will put the well-being of North Carolinians at risk. The measures would only increase the number of uninsured and reduce the access to needed care, even as North Carolina’s Medicaid program provides critical health care and long-term services to over a million seniors, people with disabilities, and children. Making Medicaid a “block grant” and imposing a spending cap do little besides shifting costs from the federal government to states, and do absolutely nothing to reduce costs. In fact, if children, seniors, and individuals with disabilities are left uninsured, everyone’s insurance premiums will increase. The government must consider other viable options that would actually decrease costs before considering policies that would put the health of North Carolina’s citizens and economy at risk.

ANNEXATION REFORM: The other side of the legislation

A new state law aimed at imposing new restrictions on involuntary annexations includes provisions that will lower hurdles to annexation for low-income communities.

Throughout North Carolina, there are minority and low-income communities suffering from “underbounding,” meaning they are excluded from city boundaries, and in turn, deprived of services that accompany being part of a municipality. These communities often lacked access to clean affordable water, adequate street lighting, and police and fire protection. Their neighboring municipality may refuse to annex them for any number of reasons – because doing so would change the racial makeup of the city, because of the costs of providing services, or because depriving these residents of a voice in city government allows the city to make decisions that are detrimental to these communities.

Even when cities are willing to annex minority or low-wealth communities, they were often unable to do so under preexisting annexation laws. The new law lowers the barriers to annexation of these communities, and requires municipalities to provide water and sewer service to newly annexed communities. Municipalities may now annex any majority low-income community if a majority of the residents request annexation.


NC Insurance Commissioner Wayne Goodman could be instrumental in stopping toxic anti-health reform legislation from passing in Congress. The Affordable Care Act requires that insurance companies spend a minimum amount of each premium dollar on health care. Currently, there are some insurance companies spending 30 to 40 cents of each premium dollar on administrative expenses such as marketing, executive salaries and lobbying.

Yet last week, a motion passed in the National Association of Insurance Commissioners (NAIC) to endorse a bill that would allow insurance companies to continue paying outsized commissions to insurance agents, leading to higher premiums for customers. The bill would remove such commissions paid to agents from consideration when calculating the minimum amount insurers must spend on health care. In turn, agent commissions would no longer be considered an “administrative expense.” Not only would premiums increase, but the bill would also reduce the share of premiums that insurance companies are required to spend on health care.

Commissioner Goodwin, who serves as vice chair of the NAIC task force considering these changes, was one of only four insurance commissioners who refused to endorse the plan that would weaken consumer protections in the new federal health care law. Overall, the task force backed the idea of allowing insurance companies to spend less on medical care and more on agent commissions.

Goodwin abstained from the vote, as he believes that some accommodation should be allowed for agents without hurting customers. Contact Commissioner Goodwin at and thank him for pushing a common-sense compromise and for supporting strong health reform.

CRUCIAL CONVERSATION: The new national health care law

Do you think you really understand the new national health care law? If you’re like most people and could stand to gain a better grasp of where we are and what’s next, don’t miss a special Crucial Conversation luncheon on July 12 with Anton J. Gunn, Regional Director of the Region IV Office of the U.S. Department of Health and Human Services (HHS). The event will offer a look at how businesses and individuals are already benefiting from the new law and a preview of the big changes that are still to come. The event is co-sponsored by NC Policy Watch and the Justice Center's NC Health Access Coalition.

Anton Gunn was appointed regional director by HHS Secretary Kathleen Sebelius last August. HHS is the federal government’s lead agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves.

The event will be held at noon on Tuesday, July 12 in the Center for Community Leadership Training Room at the Junior League of Raleigh building on Hillsborough Street. Cost for the lunch is $10. Space is limited and pre-registration is required. Click here for more information and to register for the event, or contact Rob Schofield at with any questions.

PROTECTING CHILDREN: Federal budget cuts affect programs

One would think that it might be a priority for the federal government to protect its future citizens from harm. Yet federal budget cuts could do precisely the opposite, slashing funds for programs that directly aid children across the country.

As federal lawmakers try to cut the deficit, it’s critical that they reject budget cuts that would harm children and low-income families here in North Carolina. A 5-percent cut in federal Medicaid funding would cost North Carolina nearly 9,000 jobs. Reducing funding for child care and early childhood education programs would be a direct attack against the individuals who rely on that care most. Programs for children and families did not cause the deficit. Why should they be the ones that pay for it?

It’s time to call on our North Carolina lawmakers to reject these cuts. Contact Senator Richard Burr and Sen. Kay Hagan and urge them to protect children’s programs in the 2012 federal budget agreement.


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