Not all budget cuts are created equal


First Posted: 8/24/2009

Not all budget cuts are created equal

North Carolina, as anyone whos read a newspaper in the past two years knows, is in a tight budget crunch, the likes of which havent been seen in decades.
Gov. Bev Perdue and her followers in the General Assembly Democrats, primarily, at least on the issue of budget had a chance to do something historic. They could have taken the budget process and started over, building a new budget for today and the future, funding priorities with existing revenue and delaying, or eliminating, non-essential spending.
Some, including 90th District Rep. Sarah Stevens of Mount Airy, believed there was adequate revenue available without raising one new penny in taxes and fees.
Rather than explore this, Perdue and her party went the easy way, with scare-tactic statements that education was in trouble, that teaching posts could be eliminated, that class sizes could grow. Having sufficiently frightened many voters, she then pushed through a number of tax increases without addressing the root cause of the budget crisis out of control spending.
In addition to the increase in taxes and fees, she and the General Assembly did cut spending, and were sure over the coming weeks more and more effects of these spending cuts will come to light.
Latest is the effect those ill-advised cuts will have in mental health services. Officials with Crossroads Behavioral Healthcare, the major supplier of mental healthcare services in Surry County, told the county board of commissioners last week its budget had been cut by more than $1 million.
A large part of this budget cut is in reduced Medicaid funding. Again, the new state budget is targeting those who can least afford it with budget cuts those suffering from mental health issues are among the least likely to be able to marshal other resources to seek needed treatment. To cut Medicaid funding for many of these services is, almost literally, to dump folks needing treatment onto the streets to fend for themselves.
These particular cuts also make little fiscal sense. Medicaid is a joint federal-state program in which the federal government pays nearly two-thirds of the expense. For every Medicaid dollar cut from the state budget, $2 of federal money stops flowing into North Carolina.
When a state is in a budget free-fall, among the last things it should do is cut the flow of federal dollars into its borders. That is precisely what this spending cut has accomplished. Surely, there were areas in which costs could be cut without affecting those in such dire need and without taking federal dollars away from North Carolina.

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