Summer 2013 County Legislative Update

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Summer Legislative Update for NC Counties, presented by Rebecca Troutman (NCACC) at Summer 2013 NCLGBA Conference (July 12, 2013)

Summer Legislative Update for NC Counties, presented by Rebecca Troutman (NCACC) at Summer 2013 NCLGBA Conference (July 12, 2013)

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  • 1. North Carolina Association of County Commissioners Government Relations Update N.C. Local Government Budget Association 2013 Summer Conference July 12, 2013
  • 2. Where Are We Now? • 2013-2014 Legislative Session • First Year of Biennium • Long Session that began in January 2013 and will continue until a budget is passed • Next year will be a short session beginning May 2014 – mainly to address budget issues
  • 3. Busy Long Session • In session since Jan. 30, after earlier planning session • House bill total = 1018 • Senate bill total = 726 3
  • 4. What happens now… • Budget by July 31, 2013 or another CR • Tax Reform? • Legislation that made cross-over is eligible in the short session beginning May 2014 • Political backdrop: – Hagan Senate seat up in 2014 – 2014 – all seats in NC legislature – Currently – Republican veto-proof majorities in both houses and Republican Governor 2013 Summer Attorneys’ Conference
  • 5. State Budget Process • 1st year biennium – Spending authority ceased June 30 • Each biennium Senate & House trade – Senate turn this biennium • Governor proposes Senate proposes House amends Senate rejects – Conference! 5
  • 6. State Budget Status • S 402 – Appropriations Act – In Conference – • Main County Issue – 40% Language for Lottery Funds – House Daughtry Added Language back • $100 Million – House and Senate same • Eliminates ADM (corporate tax) set-aside • Drug Treatment Courts - Governor • HAVA funds – House • Workers’ Comp Payments for Volunteer Firefighters – June 30 deadline for budget deal • CR needed if they cannot reach a budget deal
  • 7. State Budget – Senate v. House • Spending levels similar--$20.6 billion – Revenue growth still below recovery • Modest revenue growth of 3.6% • Historical above 5% • Retail sales at 3.8%--reduced to 2.7% April – Key differences in education • Senate eliminates teacher assts. in grades 2-3, funds LEA flex cut with allotment cuts • House keeps TAs, no flex cut reduction, funds private scholarships 7
  • 8. Key county budget issues in dispute • Statutory language guaranteeing 40% of lottery funds to counties – eliminated in Senate budget, maintained in House budget • Unfunded mandate requiring counties to pay for non-county employee (volunteer fire and EMS) Workers’ Compensation costs – House provision limits exposure for counties and delays implementation until 2016; Senate provision requires counties to cover any shortfalls • Extending Article 44 Hold Harmless payments – House budget extends for one year; Senate budget eliminates • Tax reform – Protect county revenues if any tax reform measures are included in the state budget 8
  • 9. Governor v. Senate v. House 9 Public Schools Governor Senate House Keep county share of education lottery funds at 22% v. statutory requirement of 40% ($80 million) Included, but new lottery estimates put loss at ($92 million) Same as Senate Permanently divert corporate tax set aside for school construction ($75 million) Permanently repeals set aside Same Fund teacher assistant allotment for K-1 grades only ($117.1 million) ($142.3 million) ($24.6 million); 4% reduction in allotment Set school bus replacement at 250,000 miles Not included ($28.4 million) ($29.8 million) Restore LEA management flexibility Not included $376.1 million Not included in year 1; $7.5 million year 2 Lower classroom teacher allotment to reflect LEA decisions on earlier cuts Not included ($286.4 million) Not included Provide merit pay of $500 per eligible teacher in year 2 Not included $10.2 million in year 2 Incentives for successful student AP completion Restructure Small School funding allotment in year two Not included Not included ($632K year 1); ($3.2 million year 2 Fund school safety initiatives Not included Not included $16 million--$12 for SROs, $2 for panic alarms, $4 for counselors, psychs., social workers
  • 10. Education Budget Provisions House PILOT PROGRAM TO RAISE THE HIGH SCHOOL DROPOUT AGE FROM SIXTEEN TO EIGHTEEN SECTION 8.49.(a) The State Board of Education shall authorize the Hickory Public Schools and the Newton- Conover City Schools to establish and implement a pilot program to increase the high school dropout age from 16 years of age to the completion of the school year coinciding with the calendar year in which a student reaches 18 years of age 10
  • 11. Governor v. Senate v. House 11 Human Services Governor Senate House Reduce county daycare administration funding from 4% of daycare allotment to 3% in opposition to NCACC policy ($2.6 million) Not included; directs all childcare subsidies thru DSS Similar as Governor ($2.5 million); rejects Senate plan to direct all subsidies thru DSS Increase Pre-K slots by 5,000 slots over biennium—NCACC goal, but funded 2/3 by lottery $9.1 million; $17.1 million in lottery proceeds Not included; decreases pre-k by 2,500 slots & shifts $ to daycare, an NCACC goal Similar to Governor’s; uses $24.8 million in lottery proceeds to add 5,000 slots; sets eligibility to 130% FP Partially restore child welfare federal funding loss temporarily; awaiting NCFAST $4.8 million nr Same Same
  • 12. Governor v. Senate v. House 12 Human Services Governor Senate House Replace lapsed federal funding for Project CARE—dementia care respite $500K Shifts $2.9 million in HCBG funds for statewide implementation Shifts $500K in HCBG funds Fund development and implementation measures for DoJ settlement $3.8 million Same Same Fund short-term pcs assistance for group home transition Not included Not included $8 million nr Increase autopsy fees Not included $1250 $1250
  • 13. HHS Budget Provisions Senate & House TIERED STATE-COUNTY SPECIAL ASSISTANCE PILOT SECTION 12D.2.(a) • DHHS Aging and Adult Services to establish pilot program to implement a tiered rate structure within SA for individuals residing in group homes, in-home living arrangements, and assisted living residences • Purposes to (i) determine the best way to implement a block grant for this program statewide and (ii) test the feasibility and effectiveness of implementing a tiered rate structure to address intensity of need, • Department to select 4-6 counties to participate, at least 2 rural counties and at least 2 urban counties. 13
  • 14. HHS Budget Provisions Senate & House Modified DETAILED MEDICAID REFORM PROPOSAL TO BE PREPARED BY DHHS; MEDICAID REFORM ADVISORY GROUP ESTABLISHED; SECTION 12H.1 • DHHS in consultation with Medicaid Reform Advisory Group to create detailed plan for, but not implement, significant reforms to State's Medicaid Program to accomplish the following: • (1) Create a predictable and sustainable Medicaid program • (2) Increase administrative ease and efficiency for Medicaid providers • (3) Provide care for the whole person by uniting physical and behavioral health care. 14
  • 15. Governor v. Senate v. House 15 Justice and Public Safety Governor Senate House Restore drug treatment courts—NCACC goal $3.4 million; 45 positions Not included Same as Senate Replace state lab equipment, enhance state crime lab DNA testing, and expand state crime lab toxicology capabilities—NCACC goal $5.4 million, most recurring Provides add. funding for toxicology analysis at state lab, outsources, & in local hospitals $3.4 million; $1 million in lab equip in 2015 Funds toxicology in Western Crime Lab & $500 K for local hospital toxicology; sets expert witness fee of $600 to support crime lab Reinvest some savings from prison closings to implement the Justice Reinvestment Act; probation & parole officers and supervisors—NCACC goal $7.1 million; 106 positions $6.3 million; 75 positions; DPS can reclassify 30 Same as Senate Improve access to magistrates—minimum of 4 magistrates per county $776 K; 16 positions $1.8 million; 39.5 positions $727K; 16 positions Close Richmond Detention Center, Wayne, Bladen, Duplin, and Robeson correctional centers, and Western Youth Institution ($20.7 million) Included & closes Buncombe & Orange correctional centers & Lenoir & Buncombe detention centers Closes Duplin, Robeson, Wayne, and N. Piedmont Women’s correctional centers and Western Youth; converts Johnston to minimum custody; closes Richmond, Buncombe, and Lenoir detention ctrs. Upgrade VIPER technology and construct additional towers Not included $25 million nr; Same as Senate
  • 16. Governor v. Senate v. House 16 Natural and Economic Resources Governor Senate House Fund 20% state match for federal wastewater and drinking water grant match requirements $6.3 million nr Included but creates new Division for admin. $6.2 million recurring (traditionally NR) Provide funding for Clean Water Management Trust Fund $6.75 million nr $4 million + 25% of state share of deed stamp receipts Fund Natural Heritage Trust Fund through direct appropriation $4.2 million Eliminates NHTF Fund Parks and Recreation Trust Fund through direct appropriation $15.5 million $11 million Maintains 75% of state share of deed stamp receipts Fund Solid Waste Trust Fund (grants and operations) through direct appropriation $2.5 million Included Keeps receipts funding in placed Fund Scrap Tire Program (grants and operations) through direct appropriation $1.1 million $500K in operations Keeps receipts funding in placed Fund shallow draft dredging—NCACC goal Not included Not included $3.6 million Year 2 Combines CWMTF & NHTF; $12 million
  • 17. Governor v. Senate v. House 17 Natural and Economic Resources Governor Senate House Fund 20% state match for federal wastewater and drinking water grant match requirements $6.3 million nr Included but creates new Division for admin. $6.2 million recurring (traditionally NR) Provide funding for Clean Water Management Trust Fund $6.75 million nr $4 million + 25% of state share of deed stamp receipts Fund Natural Heritage Trust Fund through direct appropriation $4.2 million Eliminates NHTF Fund Parks and Recreation Trust Fund through direct appropriation $15.5 million $11 million Maintains 75% of state share of deed stamp receipts Fund Solid Waste Trust Fund (grants and operations) through direct appropriation $2.5 million Included Keeps receipts funding in placed Fund Scrap Tire Program (grants and operations) through direct appropriation $1.1 million $500K in operations Keeps receipts funding in placed Fund shallow draft dredging—NCACC goal Not included Not included $3.6 million Year 2 Combines CWMTF & NHTF; $12 million
  • 18. Governor v. Senate v. House 18 General Government/Reserves Governor Senate House Provide state MOE to draw down $4 million in federal HAVA funds—NCACC goal $391K, some nr Not included Included in Year 2 Reduce state aid to libraries by 4.8%; special provision to limit funding to small and medium sized county systems ($658K) Not included Not included Eliminate funding for county veteran services Not included $138k total in Year 2 Funds eliminated in Year 1 Shift volunteer safety workers’ compensation to insurance surcharge; assess counties and cities for any gap funding Not included ($2.6 million); unsure of direct county impact House amends Senate special provision
  • 19. Governor v. Senate v. House 19 General Government/Reserves Governor Senate House Fund 1% pay raise for teachers and state employees $135.7 million Not included Grants 5 additional vacation days; $160 million in year 2 for compensation increases Fund 1% COLA for state retirees $35 million Not included Same as Senate Fully fund state retirement ARC increase $36.1 million $36 million Same as Senate Establish salary adjustment reserve fund, including $1 million OSP compensation study $20 million $1 million for compensation study $1 million for study; $10 million for reserve Establish disaster relief fund $10 million Not included Same as Governor; nr
  • 20. Budget Provisions Senate & House 20 • GOVERNMENT EFFICIENCY AND REFORM; SECTION 6.5.(a) The Office of State Budget and Management shall contract for a Government Efficiency and Reform review and analysis of the executive branch of State government, which shall be known as NC GEAR. The purpose of the review and analysis is to evaluate the efficiency and effectiveness of State government and to identify specific strategies for making State government more efficient and effective. • (1) The statutory authority, funding sources, and functions of each department, agency, institution, or program. • (4) State and local responsibilities for providing government services and funding for those services, and whether these responsibilities should be reallocated.
  • 21. Continuing Resolution H336 • State agencies to spend at 95% of current • Any budget reductions in both versions move forward • Any position eliminations in both versions move forward • CR runs til July 31 21
  • 22. Continuing Resolution H336 • Federal block grants at 2012-13 levels except… – Child Care & Development Grant at 90% – No Women’s health and Oral health or Health promotion – TANF & SAS as funded in non-controversy 22
  • 23. Tax Reform H998 • HOUSE – Lowers corp tax – Lowers personal income tax – Broadens tax base – Leaves intact county rate • County impact = +$75 million; all winners • SENATE – Eliminates Local sales tax refunds • Earlier proposal to eliminate Food Tax for Counties set aside – Caps sales tax refunds for Non-Profits – Restructures base & applies to warranties • County impact = $57 million; some losers
  • 24. H343 Court Fees • Original version to require advancing of court fees • Muddled with lapsing special provision & clerks of court not billing for fees • Bill sponsor to extend child support exemption in perpetuity ($3 mil+ savings) • Counties have 45 days to pay others • Signed June 30 • Continues RoD fees as is too 24
  • 25. Warrant Check/Drug Test H392 • DSS to verify applicant/re-applicant is fleeing felon or probation/parole violator for Food Stamps or TANF – DoJ to provide criminal history to DSS – DSS to notify potential applicant • DHHS to administer drug test to TANF if drug user – Client to pay & reimbursed if negative 25
  • 26. County Inmate Medical Cost Containment S321 • Provide parity with state prison medical cost containment initiatives – Payments to providers limited to 70% of prevailing charges or twice Medicaid rate – Enables counties to pay Medicaid rates for in-patient medical care • Counties to fund non-federal share of cost – NCACC to organize county Medicaid claims/payments • Due to disagreements with Hosp. Assoc, likely on hold until short session
  • 27. Other County Goals • County to have option to own and construct school sites and facilities (S236) • Motor vehicle property tax collection – Implementation of new system in May – LPA attempting fee increase (S305) • Design/Build option for all counties (H857) • County Omnibus (S372)
  • 28. Regulatory Reform S112 • Limits local government ability to enact environmental ordinances that are stricter than fed or state • Caveat--ordinance addresses unique geographic, meteorological, or environmental condition, adopted by 3/4s, county demonstrates to environmental agency that more stringent requirement is necessary and environmental agency approves it within 60 days 28
  • 29. Rev. Tech Corrections H14 • Provides manual methodology to ensure sales tax distributions continue as TIMS put in place • Equal to the average of the applicable tax proceeds allocated and distributed to it for the same distributional period in the preceding three fiscal years. 29
  • 30. Require Paper Ballots H607 • Bill changed to study • Moratorium on any equipment that does not produce a paper ballot until August 15, 2014 • State Board of Elections may establish program to provide for exchange of machines between counties and exchange or purchase of parts by and between counties. 30
  • 31. Funeral Laws Restructure (H811) • May modify DSS responsibilities for DSS disposal of unclaimed bodies – Includes new definition of unclaimed as those with original family interest • Need to understand current process 31
  • 32. Governor Priorities • Economic Development Restructuring (S127) – Hit snag in senate • Transportation Funding Restructuring (H817) – In law – 40% funds to statewide projects, 30% to newly drawn regional districts, 30% to existing divisions
  • 33. NCACC County Tax Rate Survey 33 State Average Effective Tax Rate$0.6375 Rates Sales Assess Effective Avg $0.6285 Avg increase $0.0336 105.2% $0.6375 Avg decrease ($0.0164) High $1.0300 $0.1070 139.8% $1.1143 Low $0.2790 ($0.0360) 85.9% $0.0000 Increases = 20 Total = 70 Decreases = 10 Max = 1.40 No change = 67 Total >110% = 16 Interim = 3 Total >115% = 11 100 SA above 100% Rate Changes Summary of Actions
  • 34. HHS Consolidation 34
  • 35. NCACC Training • Affordable Care Act –Impacts on counties as: • Employers • Service Providers • Eligibility Determination
  • 36. Questions / Comments Thank You!