MEDIA RELEASE: Federal funding cuts mean NC budget needs to plan for $13 billion more over 10 years

As lawmakers begin to hash out the state budget this week, a new report shows they need to address anticipated federal cost shift or lose vital services to North Carolina.

Raleigh (June 6, 2017) — As the N.C. House and Senate head into Conference Committee to talk about the state budget, federal funding cuts loom overhead. Given the massive cuts to federal funding proposed by the President, North Carolina would have to come up with at least $13 billion in additional revenue over the next 10 years to maintain existing vital programs. A new report from the Budget & Tax Center looks at the implications of these federal funding cuts for North Carolina and what it means that the N.C. Senate and House budget proposals do not currently plan for what happens if North Carolina has to assume these costs.

In North Carolina, federal funds currently provide 32.7 cents of each state revenue dollar. Among the federal cuts to programs in North Carolina proposed by Trump:

  • Trump’s budget would requires states to pay for 25 percent ($562 million) of SNAP (formerly known as food stamp) benefits by 2023. This would be $3.9 billion over the next 10 years.
  • NC would need to come up with an additional $6 billion over 10 years to maintain Medicaid.
  • In 2018 alone, North Carolina would need to make up $306 million to replace the loss of discretionary grant funding proposed by Trump’s budget. This includes cuts to Social Services Block Grant, the Low Income Home Energy Assistance Program, and the Community Development Block Grants.

“President Trump and some in Congress have made it clear that they intend to reduce the role of the federal government and shift costs to the states by cutting federal funding for health care, food assistance, and many other areas,” said Luis Toledo, Policy Analyst at the Budget & Tax Center, a project of the NC Justice Center. “Such a cost shift to states will ultimately mean that North Carolina, and most Southern states, will be left behind and residents will be left out of the benefits of a thriving economy.”

The report, authored by Toledo and Alexandra F. Sirota, Director of the Budget & Tax Center, details how state policymakers will have to address the cost shift through cuts to services or increases in revenue if they continue down the path of revenue cuts as laid out in their budget proposals.

“The state is not only failing to invest at the level needed in skills training, community economic development, and services to poor families—even as communities continue to struggle with mass job loss and high poverty rates—but is also failing to adequately plan for the federal government’s cost shift to states,” said Sirota.

Read the full report here.

Also: Check out BTC’s chart that provides the similarities and differences in the Senate, House and Governor’s budget proposal in one easy-to-read place.

For more information, contact: Luis Toledo, Budget & Tax Center Policy Analyst, at (919) 861-1451 or luist@ncjustice.org; or Mel Umbarger, BTC Senior Communications Specialist, at mel@ncjustice.org.

 

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