Budget shares

The new state budget is now a done deal. When you examine it, what kinds of major shifts in state spending do you see? N.C. State University economist Mike Walden responds.

“Well, the biggest shift that I see is really the continuation of a shift — the continuation of a trend, not just here in North Carolina but really in all states — where states have had to commit increasing amounts of money and increasing shares of their budget to pay the medical expenses of folks who need assistance.

“Primarily this is through the Medicaid program, which is a joint federal state funded program. The feds kick in money. States kick in money. And we see this has been over the last three or four decades really one of the fastest growing parts of state budgets, and the real key here is that it’s spending that the state really can’t control.

“For example, in this budget over the next two years our legislators have targeted or allocated an additional 11 percent of the increase for Medicaid Health and Human Services specifically, bigger than every other major category in the budget. And that’s a big amount of money that can’t be spent elsewhere.

“And the other concern is it may be bigger. It all depends on what kind of claims are accepted by Medicaid for payment by the feds and by the states. So, this is somewhat of an open ended part of the budget that’s been growing very, very rapidly, and I think is the biggest budgetary challenge for most states, including North Carolina.”