NC JUSTICE NEWS: Budget Cuts & Provisions + Consumer Finance Loans + Protecting Social Security

April 26, 2011

EDUCATION CUTS: NC House leaders break budget promises

Turns out promises from NC House leaders that their budget won't cut teacher positions are bogus.

Over the past two years, state policymakers have required local school districts to identify more than $300 million in cuts to personnel and expenses—forcing districts to cut teachers by more than 4,200; teaching assistants by nearly 3,700; and other positions by more than 2,700.

Now the House budget calls for increasing these local discretionary cuts by $42 million and $106 million each year of the upcoming biennium. The House also wants to eliminate funding for teacher assistants in grades 2 and 3 and cut funding for school administration and other non-teaching positions. With all those cuts, local districts will likely have no alternative but to cut teacher positions.

Legislators don’t want voters to blame them for larger class sizes and massive job losses, so they’re shirking their responsibilities and pushing the hard decisions down to the local level.

MEDICAID: Budget cuts would hurt economy and families

The NC House budget would cut more than a billion dollars from the health & human services budget over the next two years, with more than $710 million of that coming from Medicaid. That’s a bad idea for several reasons.

First, deep reductions in Medicaid funding mean fewer services for people who need them. In fact, 1.5 million people get care through Medicaid, and two-thirds of recipients are children.

Second, these cuts would mean the loss of more than $2 billion in federal Medicaid funding, since the federal government matches state Medicaid expenditures 2 to 1.

Third, the budget calls for lower reimbursements for the medical professionals who provide them. So, money that would have gone from the federal government into the pockets of local providers—and from there into local economies that need those dollars to create jobs—will instead stay in Washington, DC.

Clearly, job creation is not a priority for NC House leaders.

CONSUMER FINANCE LOANS: Fighting House Bill 810

At a time when North Carolina families are struggling, state leaders should do all they can to help, including maintaining critical safeguards that protect consumers.

Yet, when it comes to high cost consumer loans some legislators are moving in the wrong direction. Legislation has been filed to increase rates and fees on small loans, benefiting large out-of-state financial institutions and costing NC consumers millions. House Bill 810 would significantly increase the cost of consumer finance loans in North Carolina by injecting new fees, higher rates and other troubling provisions into the law that governs these loans. Storefront lenders would be permitted to increase interest and fees—which under current law already can add up to 54% APR—into triple-digit percentage rates.

Six out-of-state lenders would principally profit from the bill, including CitiFinancial, American General, and others that have already received bailout funds from the federal government. These financial behemoths would profit even more and dominate the consumer finance industry at a time when millions of North Carolina consumers struggle with family budgeting, layoffs, stagnant wages, and high-cost debt.

A recent poll by NC Policy Watch shows that an overwhelming majority of voters—84 percent—oppose House Bill 810. State leaders should stand with their constiutients and act to maintain these essential consumer protections.

DEFENDERS OF JUSTICE: Buy tickets and become a sponsor today

The Justice Center will present its annual Defender of Justice Awards on May 19 to honor individuals and organizations that have made significant contributions in the fight against poverty in areas that reflect the scope of the Justice Centers work.

Join us on May 19 to celebrate the great work of this year’s award recipients. Buy tickets online today.

You can also help support the Awards celebration and the ongoing work of the Justice Center by becoming a sponsor of the event. Click here for information about sponsorship options.

The NC Justice Center's
2011 Defenders of Justice Honorees

Thursday, May 19, 6 pm - 9 pm
American Tobacco Campus, Bay 7, Durham, NC


State Senator Josh Stein of Wake County for his commitment to expanding protections for homeowners, consumers and low-income families throughout North Carolina

State Representative Angela Bryant of Nash County for her work to improve NC's systems of civil, criminal and juvenile justice, fight poverty, promote economic development and affordable housing, and secure equal rights for women and people of color

Democracy North Carolina for fighting to protect voting rights, increase voter participation and reduce the influence of big money in politics

The law firm of Elliot, Pishko and Morgan of Winston-Salem for two decades of effective and passionate advocacy for workers' rights and civil rights

Coalición de Organizaciones Latino-Americanas (COLA) of Asheville for their work improving the lives of workers and families in Latino communities in western North Carolina

Community Success Initiative for empowering and giving hope to people released from incarceration and helping them access the services and opportunities they need to build new lives


NC HEALTH EXCHANGE: Small business owners speak out

Last week, for the first and possibly only time, average North Carolinians got a chance to speak about a bill that would put the state's health care system under the control of insurance companies.

Small-business owners, advocates and others jumped at the chance to comment on House Bill 115, which would give Blue Cross considerable power over the new health exchange. This legislation, intended to serve as a consumer-focused insurance marketplace and watchdog, would severely undermine the exchange's ability to serve and protect consumers.

Lou Meyers, who owns a small business in Durham, spoke to the committee and said he's concerned that, with health insurers running the health exchange, any small business owner would not be able to get a good deal on health coverage. Trish Miller, a small business entrepreneur and member of the National MS Society–NC Chapters, said she's concerned new taxes in the exchange will cause prices to rise and only sicker people to sign up for coverage.

SPECIAL PROVISIONS: A key element of the state budget

The budget numbers coming out of the NC House appropriations committees are important and will (hopefully) get a lot of press as people around the state realize how devastating the cuts will be and demand better from their lawmakers.

But in addition to the appropriations, there’s another document that will make up the state’s final budget—the special provisions. Theoretically, the special provisions guide administrative agencies that implement funding changes and give details on the use of federal dollars. But this document often includes massive policy changes that legislators put in so they could avoid going through the regular legislative process.

Here's one example of the damage that special provisions can do. Leaders of the House subcommittee working on the health & human services budget claim they're not cutting any optional Medicaid services—which includes some pretty non-optional stuff like vision or dental care, prescription drugs, mental-health services, prosthetics and hospice care. But the special provisions direct HHS Secretary Lanier Cansler to take whatever action is necessary if projected savings aren't realized. And since the savings in the budget are vague and unrealistic, it's almost certain optional services would be on the chopping block.

Most people never hear about what’s in the special provisions, but we would like to change that. Throughout the upcoming week, Justice Center staff will write about what’s in these special provisions and what they could mean for North Carolina. You can find the posts on NC Policy Watch’s blog, Progressive Pulse. Stay tuned.

NC WORKERS: Legislative assaults on injured, unemployed workers

Two bills currently in debate at the General Assembly seem unrelated, yet mean everything in the protection of North Carolina workers. Passing one would slash disability payments; passing the other would ensure unemployed workers would continue to receive their benefits.

House Bill 709, with the misleading title "Protect and Put NC Back to Work," would dramatically reduce benefits to workers that have been permanently disabled on the job. The bill would limit the window of payment to just under 10 years, and it would allow employers, their attorneys and insurers to have access to a worker’s medical records without the worker’s authorization.

Until now, the Workers' Compensation system has ensured that employees' medical bills are paid, and it sees that harmed workers receive two-thirds of their average weekly wage during their period of recovery for on-the-job injuries. HB 709 would dismantle injured workers' support system and would jeopardize the well-being of working families across the state.

Meanwhile, 37,000 unemployed workers are waiting anxiously as House Bill 676 sits in limbo. The bill would ensure that long-term unemployment workers in North Carolina can continue to claim extended benefits, a special program instituted when the unemployment rate remains persistently high. Recent national data from the American Community Survey found that unemployment insurance benefits kept 3.3 million Americans out of poverty from 2008 to 2009.

The most recent poll by NC Policy Watch shows that North Carolina voters strongly support extending benefits for unemployed workers. With hundreds of thousands of people unemployed in North Carolina, state leaders must show their support for working families instead of dismantling basic protections for workers and making it more difficult for the unemployed to receive benefits.

SOCIAL SECURITY: Group gathers to support, strengthen benefits

On Thursday, groups will be gathering across the country to call on the federal policymakers to strengthen social security – not cut it.

It is increasingly clear that Congress is considering changes to Social Security, including cutting benefits and raising the retirement age, as part of efforts to address the deficit through significant cuts to the country’s system of protections and promises to its citizens.

Social Security serves the country’s retirees with a modest monthly benefit, helps families who have a member with severe disabilities, and helps people who have lost a spouse or children who have lost parents. This program provides benefits to more than 1 out of 6 residents in North Carolina. It is also the major life and disability insurance protection for more than 95 percent of the state’s children.

Join Congressman Brad Miller and others at a rally in support of maintaining Social Security on Thursday, April 28, at noon in front of the Social Security Building at 4701 Old Wake Forest Road.

CHARTER SCHOOLS: Investigation links school to conservative donor

The Thomas Jefferson Classical Academy, a public charter school in Rutherford County, is quick to promote the school’s high SAT test scores and international field trips to China, Europe and South America. But not as widely advertised is the Western North Carolina public school’s connection to John Bryan, whose $37 million family trust, the Challenge Foundation, contributes heavily and regularly to conservative causes like challenging global warming research and scaling back government.

Out-of-state organizations like Bryan’s Challenge Foundation stand to play bigger roles in North Carolina’s public education system with the state on the verge of lifting a 100-school cap on public charter schools. The GOP-sponsored Senate Bill 8, which would give charters more access to education funding in addition to lifting the cap, is expected to land on Gov. Bev Perdue’s desk shortly.

In North Carolina, the push for charters is coming as the state grapples separately with a $1.9 to $2.4 billion budget shortfall that will result in drastic cuts to the state’s public schools, with proposals like eliminating most teachers’ aides positions in classrooms or cutting early education programs being considered.

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