North Carolina Budget Increases Medicaid Contribution To Counties

The North Carolina General Assembly onSaturday tentatively approved a $20.7 billion budget under which the state government would absorb counties' share of Medicaid costs in exchange for a portion of counties' sales tax revenue, the Charlotte Observer reports. The Senate approved the budget measure 25-13 and the House 65-53 (Johnson, Charlotte Observer, 7/29).

North Carolina is one of a few U.S. states that requires localities to contribute to Medicaid. In the past 10 years, Medicaid spending has increased steeply, and county leaders have been seeking resources to pay the bills, according to the Observer.Under the proposal, the state will begin contributing more to Medicaid in 2007 until it eventually funds the full cost of the program by 2009.In exchange, the state would receive half a cent of counties' share of the sales tax.

According to the Observer, most counties will experience a revenue increase from the deal because Medicaid costs have risen so much. Counties that stand to lose moneyfrom the deal will be reimbursed the difference plus $500,000 (Johnson,Charlotte Observer, 7/28).

The budget also calls for a $20.5 million increase to mental health services and up to $50million toward cancer research. Final approval of the budget is set for Monday (Charlotte Observer, 7/29).

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