Austerity with an Asterisk
In Oregon they cut short the school year, and in Kentucky they
let inmates go free. But as the budget crunch continues for a
third year in North Carolina, class size is shrinking, more
officers are guarding prison inmates, and a waiting list for
children’s health coverage has dwindled to nothing.
From schools to prisons to services for the disabled, many
state functions have remained intact since the first
billion-dollar budget shortfall nearly three years ago, state
officials say. Gov. Mike Easley has demanded that classrooms not
be compromised. He and the legislature have agreed to raise some
taxes each year. And in many areas of government, officials
report that good management has allowed them to preserve their
“So far, we have been able to rearrange the way we do things,
to work harder, smarter, and not let the reductions that we’ve
had over the past biennial budget destroy our core mission,” said
Carmen Hooker Odom, secretary of health and human services. She
oversees $ 3.7 billion in state spending, the second-largest
budget after public education.
Not everyone agrees. Some point to specific programs, such as
child abuse prevention or historic sites, that have been nibbled
at. Others say that although spending has not decreased broadly,
it also has not kept pace with demand, which in some cases has
risen substantially as the economy has fallen.
Even those who think the effect has been minimal say that will
not be the case in the coming year, when more cuts are likely.
“We’ve had a huge deficit of services, like tens of thousands
of people not beng served, long before this budget crunch,” said
Beth Melcher, who lobbies for the North Carolina office of the
National Alliance for the Mentally Ill. “Now, you have more
people needing services, because that’s what happens when you
have an economic downturn, and you’ve cut all these rates for
providers, so they’re seeing fewer people. So even if you can
look at a budget number and say, ‘We’re not reducing that
number,’ there’s a bigger story underneath it.”
Still, there are plenty of examples just in the Department of
Health and Human Services where programs have not been cut and,
in some cases, are serving more people than ever.
Medicaid, the enormous health-insurance program for the poor,
elderly and disabled, has reduced payments to providers but has
suffered no reductions in benefits or eligibility over the past
A longer wait for aid
The waiting list for child-care subsidies has declined from
about 15,000 to 10,308 over the past year, and funding has ticked
Even Health Choice, the health program for low-income children
that was frozen with a waiting list of 34,000 in an early round
of budget cuts two years ago, is now open to all eligible
children and serves nearly 100,000 children.
“There’s been some cost-cutting, but it hasn’t been so huge
that it’s starting to drastically affect people yet,” said Adam
Searing, a public-interest lobbyist who works on health issues
for the poor.
In state prisons, officials say they have maintained the ratio
of three inmates per guard, even as the number of inmates has
grown. The Attorney General’s Office is keeping up with a steady
increase in appeals of criminal convictions without adding more
people, Chief Deputy Edwin Speas said.
The state budget itself demonstrates why many services have
managed to go on. It has continued to grow through the crisis,
from $ 13.22 billion in spending three years ago to an estimated
$ 13.95 billion now. Personnel records show that the number of
state employees as of April 30 — 91,186 — is about 1,100 less
than three years ago. The figure, which excludes teachers and
professors, amounts to a 1 percent reduction in the work force.
Those numbers are possible in part because in each year of the
crisis, the legislature has drummed up new money. Two years ago,
at Easley’s prodding, the General Assembly raised the general
sales tax. Last year, it allowed local governments to raise taxes
in exchange for taking state aid to local governments.
“It’s the same story,” said Jonathan Hill, state director of
Citizens for a Sound Economy, a national antitax organization.
“We seem to be looking for more revenue, and the first place we
should be looking is cutting the size of government. And that’s
been the big failure.”
Whether education has emerged unscathed depends on who is
talking. Easley has demanded extra money for More at Four, his
academic pre-kindergarten program, and to lower class size in
elementary school. He has pledged that he will not allow the
budget crunch to harm the classroom, whether public schools,
community colleges or public universities.
Still, education officials say budget cuts have made it hard
to keep up with growing numbers of students. Services outside the
classroom such as financial aid and career counseling are
suffering. Guilford Technical Community College used to evaluate
an application into the college’s health services programs in one
week. It now takes a month.
“It’s not that the governor and the General Assembly have not
worked with community colleges — they have,” said Kennon Briggs,
the system’s vice president for business and finance. “But
through the process of having to revert funds this year and last
year, the places we have been hurt are in student services and in
expanding offerings to meet the demand.”
Beyond education, there are more obvious examples of programs
reduced or eliminated over the past three years, notably those
for troubled youths.
The Department of Juvenile Justice and Delinquency Prevention
cut $ 20 million over the past two years by returning nearly half
of the youths in detention centers back to the counties, which
finance group homes, counseling and other services. But the
counties got no additional money for those youths.
In Wake County, the waiting list can be as long as three
months for group homes and family counseling. Almost all the
money serves juveniles already in the criminal justice system,
and little is left for prevention. That’s troubling to advocates
who argue that the state will pay more in the long run, when
troubled youths become prison inmates.
Down the road
“We need to take a longer-term view of this,” said Mike Rieder
of Haven House Services of Wake County, which runs two group
homes, a runaway shelter and a counseling program. “If we don’t
provide resources to adequately serve these kids, the population
that will grow is the prison population.”
Many smaller services scattered across state government also
have taken hits. A sampling:
– The SBI has lost lab technicians, expanding the backlog of
evidence awaiting analysis. Cuts also led the SBI to cancel its
academy last year, just as many agents retired. The SBI is now
down about 30 agents, said Director Robin Pendergraft, forcing it
to forgo investigating lesser crimes and to turn down some crime
scene investigation work for municipal police. Last year, SBI
agents opened 3,699 cases, 392 fewer than the previous year.
“We’re having to be creative, and we’re having to prioritize
so that the most violent crimes are addressed,” Pendergraft said.
– State parks have lost 13 positions this year, forcing
rangers to do maintenance work and to cancel some wildlife
education tours for schools. Last week, ranger David Brown was
the sole guide for 54 second-grade students on a nature walk
through Raven Rock State Park in Harnett County. Usually, the
park would assign a second ranger for such a large group.
“It knocks out pointing out smaller things like spiders,
lizards and beetles and stuff,” Brown said.
– At the Division of Archives and History, six positions
responsible for reviewing applications to the National Register
of Historic Places have been eliminated, causing the review time
for such applications to grow from three months in 1997 to 15
months in 2002.
– At the Department of Environment and Natural Resources,
backlogs for permits have grown — although officials say the
budget crisis is only partly to blame for the attrition that has
left offices short-staffed. The backlog for permits for
wastewater and industrial discharges has risen from 111
applications two years ago to 239 now.
There also is the cost of not expanding programs.
Division TEACCH, a program at UNC-Chapel Hill to treat
autistic children, absorbed a 7 percent cut this year, while
demand for its services rose 25 percent. Now, families wait an
average of six or seven months for a diagnosis, up from four or
five months, said program director Gary Mesibov.
Similarly, a broad reform of mental-health services is
supposed to begin July 1. But the state has not invested the
money in the community-based services that are supposed to help
move the mentally ill out of institutions, said Melcher, the
lobbyist for the National Alliance for the Mentally Ill.
“There’s nowhere for them to go,” Melcher said. “Any savings,
the folks suck it right up to plug a budget hole. So any of the
money that was supposed to be saved at the institutions and
reinvested in the communities, that just hasn’t happened.”
There is the alternate view that the state cannot afford to
provide all the services under the sun, even if they have value.
“There is always more that one would want to spend on than you
have available,” said John Hood, president of the John Locke
Foundation. “So it gets a little bit tiresome to hear about state
government having unmet needs. Even wealthy families have unmet
Still, even those agency chiefs who say they have suffered few
ill effects of the budget crisis warn that they cannot absorb
further spending reductions without harming services. Lawmakers
are considering freezing Health Choice, narrowing eligibility for
Medicaid and laying off teaching assistants, among other options.
“There comes a time when you can no longer continue to
fine-tune,” said Philip Price, an associate state superintendent
with the Department of Public Instruction.