State Health Plan
07/24/2008 | 04:58 PM
After the General Assembly passed its 2008 Budget,
Democratic leaders announced they had discovered a
quarter billion dollar deficiency in the State Health Plan for
teachers, state employees and retirees.
This involved reserves and operating expenses, turning a projected $50 million surplus into a possible $200 million deficit during the fiscal year that began July 1, 2008.
At first these leaders planned to do little about it now. They then proposed to take any shortfall from the Rainy Day Fund. The goal for the Rainy Day Fund is 8 percent of last year’s operating budget, or $1.704 Billion. Instead, it is now only funded at $787 million.
In the Appropriations Committee, Chairman Mickey Michaux violated the Rules by refusing a Republican Alternative, offered by Rep. Leo Daughtry, to be discussed. On the floor Rep. Paul Stam made a motion to suspend the Rules so the Republican Alternative could be debated. Everyone understood that this vote was on the merits of the Republican alterative. Nevertheless, it failed 48 to 62, with 61 Democrats voting against the Stam Motion.
The Republican Alternative would have required the Governor to begin now to find a 1 percent savings in the State’s Budget so the coming State Health Plan crisis, which is surely coming this fall or winter, could be averted.
For Background: For these two years the Budget has increased by 13 percent, or approximately twice the rate of inflation plus population growth. In previous years Governor Easley has imposed unilateral cuts on his departments of almost 5 percent. Of course he can effect a 1 percent savings, and if he starts now it won’t be as painful as it will be if he waits until fall or winter. Senate Democrats refused to do anything about the problem.
To refuse to adjust the Budget after a known $200 - $250 million problem was identified was irresponsible. State Auditor Les Merritt announced July 24 he had opened an investigation into the State Health Plan’s oversight and financial forecasts.
This involved reserves and operating expenses, turning a projected $50 million surplus into a possible $200 million deficit during the fiscal year that began July 1, 2008.
At first these leaders planned to do little about it now. They then proposed to take any shortfall from the Rainy Day Fund. The goal for the Rainy Day Fund is 8 percent of last year’s operating budget, or $1.704 Billion. Instead, it is now only funded at $787 million.
In the Appropriations Committee, Chairman Mickey Michaux violated the Rules by refusing a Republican Alternative, offered by Rep. Leo Daughtry, to be discussed. On the floor Rep. Paul Stam made a motion to suspend the Rules so the Republican Alternative could be debated. Everyone understood that this vote was on the merits of the Republican alterative. Nevertheless, it failed 48 to 62, with 61 Democrats voting against the Stam Motion.
The Republican Alternative would have required the Governor to begin now to find a 1 percent savings in the State’s Budget so the coming State Health Plan crisis, which is surely coming this fall or winter, could be averted.
For Background: For these two years the Budget has increased by 13 percent, or approximately twice the rate of inflation plus population growth. In previous years Governor Easley has imposed unilateral cuts on his departments of almost 5 percent. Of course he can effect a 1 percent savings, and if he starts now it won’t be as painful as it will be if he waits until fall or winter. Senate Democrats refused to do anything about the problem.
To refuse to adjust the Budget after a known $200 - $250 million problem was identified was irresponsible. State Auditor Les Merritt announced July 24 he had opened an investigation into the State Health Plan’s oversight and financial forecasts.