The federal government's decision to withhold payment of $175 million for a state mental health program because of concerns that the state had been paying improper claims is a good deal more serious than the governor's senior adviser described it.
Dan Gerlach, Gov. Mike Easley's senior policy adviser, called it a "a cash-flow issue" after The News & Observer found out about the deferral last month and began asking questions.
"They're not saying, 'We're not going to pay,' " Gerlach said. "They're just saying, 'We need some questions answered about this.' "
But eight days later, Dempsey Benton, secretary of the Department of Health and Human Services, was singing a different song. In a letter to the federal Centers for Medicare & Medicaid Services, Benton said "a deferral of this magnitude is financially disastrous to the citizens of NC and any additional deferment threatens the sustainability of the entire NC Medicaid program."
Benton said his letter was "our first step in offering clarification" leading to release of the money.
"We are confident that we have effectively managed this program such that there is no unusual risk for abuse present today as mentioned in the deferral letter," Benton wrote.
The N&O reported in February that government audits indicated the state had wasted at least $400 million in 16 months by paying claims for skill-building community support services that were medically unnecessary.
In response to Benton's letter, the CMS regional office in Atlanta said it would begin a review of community support claims June 2.
New budget panel leaders
The state Senate has two new budget committee chairmen, Charlie Dannelly of Charlotte and Charles Albertson of Beulaville.
They replace Sens. Kay Hagan of Greensboro and Walter Dalton of Rutherfordton, who will step down to "advisory" roles.
Read: They don't have to go to all the meetings.
Hagan and Dalton are running for higher office, she for U.S. Senate and he for lieutenant governor.
Dannelly and Albertson join Sen. Linda Garrou of Winston-Salem as the "big chairs" on the budget-writing panel.
Pronunciation is everything
State Sen. David Hoyle may want to take diction classes.
In a recent meeting of the 21st Century Transportation Committee, the Gaston County Democrat said he got into hot water over an unclear word.
At the time, Easley was on an economic development trip to Italy.
From the committee's minutes:
"I got a call from the Governor's Office this morning asking me a question. I said I was making a comment this morning and I said this is what I would recommend to the Governor that he do it by executive order but the Governor is in Italy. One of the staff members said I called the Governor an idiot. I just wanted to make clear the word Italy and idiot are very close but the Governor is certainly my friend and not that."
Renaming the arts school
Despite opposition from some alumni and supporters, the N.C. School of the Arts in Winston-Salem has moved one step closer to a name change.
The UNC Board of Governors voted last week to seek legislative approval to change the school's name to the University of North Carolina School of the Arts.
UNC board members had received e-mail from alumni opposed to the change.
Leaders of the school had argued the change would tie the school more clearly to the UNC system and raise its visibility among donors.
Higher cigarette tax backed
The N.C. Alliance for Health says 20 cents is not enough.
The nonprofit coalition of health-care associations argues that Easley's proposed increase in the cigarette tax from 35 to 55 cents a pack will not stop people from smoking.
In a news release, the group argues that tax increases of 20 cents a pack or less "provide no significant smoking reductions" or related savings in health-care costs.
Instead, it argues that the state should raise the tax 75 cents.
The group says that would prevent nearly 95,000 preteens and teenagers from starting to smoke, while causing a 16 percent decrease in youth smoking.
North Carolina has the seventh-lowest cigarette tax in the country.
By staff writers Pat Stith, Lynn Bonner, Ryan Teague Beckwith and Jane Stancill. firstname.lastname@example.org or (919) 829-4537