Governor Pat McCrory

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Governor Pat McCrory says he blames the previous state government officials from budget spending practices even though the Medicaid liability continues to impact the entire budget.

“It is time to solve this mess, not kick the can down the road and manipulate the budget as was done in the past. It stops now,” said McCrory.

McCrory told the state budget director to transfer available state funds to the Division of Medical Assistance (Medicaid) to offset the state’s multi-million Medicaid liabilities.

State agencies were also issued a firm ultimatum by the new Gov. to halt all salary increases, lower all travel expenditures, all in an effort to cover the state’s Medicaid liabilities.

“If we stop this practice and get a handle on the Medicaid hole, we’ll have balanced budgets that fund our priorities, including education, and avoid mid-year shortfalls,” McCrory said.

According to state officials, the Division of Medical Assistance is facing $100 million or more in cost overruns.

McCrory officials also say the Perdue administration’s Department of Health and Human Services held over $132 million, an unpaid bill due to the federal government in June 2012, an item mentioned in a recent state audit.

The audit also noted that under the previous administration, sufficient cost control measures were not in place, contributing to significant cost overruns- totaling $1.4 billion each each of the past two years and $1.8 billion in 2010 alone.

“Since January, we have been charting a new course of accountability within the Department of Health and Human Services,” said Secretary Aldona Wos, M.D. “We are aggressively pursuing reform to strengthen our Medicaid system and make it more efficient, and I applaud the governor for taking bold and immediate actions to pay off our debts while supporting reform.”

State Budget Director Art Pope added, “Despite positive cash balances, we need to live within our budget and make sure everything is disclosed and accounted for. That is why the state needs to reduce spending now, rather than waiting until the end of the fiscal year, or using accounting gimmicks to pass on the costs to next year.”

Art Johnston of the Fiscal Institute said that the executive order is nothing new for incoming administration.

“It’s a cheap shot taken at the Perdue administration for getting us through a recession. Nothing has been done in North Carolina that should be on the back of one person.,” said Johnston.