Waiting on Washington

Waiting on Washington

- in Fitzsimon File

This was supposed to be the General Assembly session in which lawmakers passed a budget on time, maybe even early, a few days before the next fiscal year begins on July 1st

It is not only an election year after all, but an especially contentious one, with high voter anxiety about the economy and the anti-incumbent sentiment it has created. Democratic legislative leaders are anxious to get out of Raleigh and back to the campaign trail in their efforts to maintain a majority in the House and Senate.

Then there are the ongoing investigations in the activities of former Governor Mike Easley and his associates and the widespread speculation that indictments are on the way. No Democrat wants to be in session if and when that happens.  

For a while, it looked like the plans for speedy session were on track. The Senate passed its budget May 20th and the House gave final approval to its spending plan last Friday, a week ahead of the already ambitious budget calendar laid out before the session.

But now uncertainty in Washington threatens to derail lawmakers' efforts to pass budget by the end of the month and return home to talk to voters. Both the House and Senate budgets count on more than $450 million in additional Medicaid funding from the from the federal government that seemed such a foregone conclusion that more than 30 other states included the additional money in their budgets too.

Congress was widely expected to approve the funding by Memorial Day, but partisan wrangling has delayed it, leaving state lawmakers in a financial and political lurch. It is not a problem they can ignore. The state constitution requires a balanced budget.

That leaves legislators only a few alternatives if Congress continues to drag its feet, and none of them have much support. 

House and Senate negotiators could proceed in their work to resolve the differences between the two chambers budgets and deal with the $450 million hole by passing another bill that outlines the additional cuts that will be made if the federal money doesn't come through. 

That means more tough decisions in the next few weeks about where to make deep cuts to education and human services, areas that are already reeling under reductions made last year and the ones proposed by the House and Senate this session.

Lawmakers could agree on a budget and direct Governor Perdue to make the cuts if the federal money is not forthcoming, but that approach has little support among legislative leaders who want to protect their priorities and programs.

The House and Senate could start the budget process over or at least reconsider the budgets they have passed and come up with a version that makes the additional cuts. Senator Linda Garrou half-heartedly suggested that approach recently, but nobody wants to slash budgets further if there is a chance they don't have to.

Lawmakers could also include new revenue to make up the difference, but that was ruled out before the session began and nothing seems to have changed in the political calculus about what a tax increase would mean in an election year. 

The General Assembly could simply stay in session until there is a definite answer from Washington about the Medicaid money, but that's the most unlikely scenario of all.  Lawmakers could pass a budget in the next two weeks and then come back in special session if the additional federal funding isn't approved, but that isn't appealing either.  Legislators want to leave Raleigh soon and stay out of town until next January.

But those are the only options left in a year when uncertainly is the last thing legislative leaders were hoping for.

More than 300 members of the State Employees Association rallied at the General Assembly Tuesday to protect jobs and state services. That's understandable given the current problems with the state budget, but it might have been a better idea to have protested in Washington, where Congressional inaction is now the biggest threat to thousands of jobs in North Carolina and preventing an end to the legislative session in this most unusual of years.