N.C Local Government Budget AssociationDecember 7, 2012

NCACC Legislative Update

Johanna H. ReeseDirector of Government Relations

2012 Election Results

Executive Branch

• Gubernatorial party switch• Turnover throughout cabinet agencies• Large transition team at work• Relationship with legislature?• Council of State – little turnover

NC General Assembly

• House majority up by 9 to 77-43• Senate majority up by 2 to 33-17• Both chambers have veto-proof

majorities• House – 43 freshmen; 69 members

serving 1st or 2nd term• Senate – 14 freshmen; 30 members

serving 1st or 2nd term

NC General Assembly

• 578 years of legislative experience lost• Democrat minority in both chambers

predominantly African-American• 8 current or former county commissioners

won seats – 1 in Senate; 7 in House• 25 total former commissioners in GA

County Changes121 – New Commissioners

304 – Republican County Commissioners

270 – Democrat County Commissioners

6 – Unaffiliated County Commissioners

54 – Republican majority boards

44 – Democrat majority boards

2 – no majority

What This Means?

• New Relationships!• Get to know your legislators• NCACC outreach

• Lots of education!• County orientation for new legislators, new

state agency heads & administrators• New commissioners up to speed on critical

county issues

2012 Legislative Issues

Human ServicesConsolidation (H438)

• Provides option to all boards of commissioners to restructure human services– Under BOC or create consolidated human services

board• Advisory health board req’d if no consolidated HS board

• BOC to consolidate health or DSS or both– No mental health, public health authority or

hospital• Maintenance of effort for health approps.

Human ServicesConsolidation (H438)

• 5 counties to date initiated consolidation– Montgomery, Buncombe, Brunswick,

Edgecombe, Bladen• 6 counties pending SOG consultation• Others awaiting new commissioner

transitions

Adult Care Home Transition

• Federal policy issues regarding adult care homes– Personal care services & State/County

Special Asst institutional rates create institutional bias

– Certain adult care home pops w/ 50%+ mentally ill lose Medicaid funding; need to transition to community housing

Legislative Response to ACH

• Creates “Transitions to Community Living Fund”– $50 M to transition mentally ill to community &

backfill (temporarily) loss of PCS Medicaid funds to adult care homes

– Implement 1915 I waiver for special care units only

Group home population excluded….

Legislative Response to ACH• Restructures State/County Special Asst. In-Home

program, effective Feb. 15, 2013– All counties must participate (9 did not)– All counties must maintain 2011-12 approps in

2012-13– All counties must maintain filled slots or fill vacant

slots• In-home rate = adult care home rate• No new county service $; case mgt $ may be

needed

Action to Date

– Blue Ribbon Commission on Transitions to Community Living formed• Housing & Transitions Subcommittees appointed

– DOJ MOU agreement to buy 3,000 transitional housing spaces, 1-time transition supports, community services• Transition coordinated by LME-Mco

Action to Date

– All IMD assessments completed• 4-5 homes exceeding 50%; 250 clients• All providers filed temporary restraining orders

– All PCS assessments completed• 9300 clients no longer eligible• Letters to be mailed in next week

– Special session to deal with group homes?– State/county special assistance as funding

source?

Non-Emergency Medicaid Transport

• State budget directs NC-DHHS to develop & issue RFP for non-emergency Medicaid transportation– Dept must study impacts on human services

transportation system prior to RFP• NCACC shared county concerns re

interruption of coordinated county network

NCACC Preparation for Next Biennium

NCACC Legislative Goals

• All counties asked to submit goals thru Sept. 17

• Goals vetted by NCACC steering committee, legislative goals committee, NCACC board of directors, all counties via NCACC Legislative Goals Conference

NCACC Legislative Goals Process(Adopted Goals Remain in Place for 2-Yr. Biennial Session)

Oct

CountiesSubmit Pro-posed Goals

Goals Referred

to SteeringCommittee

Steering Comms.

Consider & Recommend

Steering Comms.

Consider & Recommend

Goals Referred to Legislative

Goals Comm.

Legis. GoalsComm.

Considers & Recommends

Legis. GoalsComm.

Considers & Recommends

Goals Referred to Board of Directors

Board Considers

& Approves Goals

Board Considers

& Approves Goals

Goals Referred

to Member

County Boards

New BoardsTake Office,Consider &

Select Delegates

New BoardsTake Office,Consider &

Select Delegates

Delegates ApproveGoals at

Legis Goals Conference

Delegates ApproveGoals at

Legis Goals Conference

Dec Jan, 24-25Dec

General Assembly Convenes Jan. 30, 2013

July - Sept Nov 14-15

Steering Committees

• Tax & Finance• Education• Environment• Agriculture• Justice & Public Safety• Health & Human Services• Intergovernmental Relations

Process thus far….

Leg. Goals submit 58 to NCACC Board

Steering committees submit 71 to Leg. Goals

Committee

189 goals via 34 counties & 3 affiliates

County Top Ten (so far…)

• Reinstate ADM & lottery funds for school construction.• Oppose shift of state transportation responsibilities.• Preserve existing local revenue base.• Oppose unfunded mandates & shifts of state

responsibilities.• Ensure adequate mental health funding.

County Top Ten (so far…) cont.

• Limit amount that providers can charge counties for inmate medical care to no more than what is allowed by Corrections.

• Protect county revenues in tax reform consideration.• Authorize greater county oversight of electronic gaming.• Expand use of 911 funds, protect & enhance current

funding streams & maintain full operational flexibility & autonomy.

• Exempt public institutions from state & local sales taxes.

2013 Legislative Issues

Fiscal Modernization(i.e. Tax Reform)

• House & Senate leadership and staff working for several months

• Attempted a number of times before• Legislative goal of “Revenue Stability”• NCACC goals to be part of conversation and avoid

shifting of responsibilities to counties• Corporate & individual income tax, sales tax, tax on

services, property tax…• Exemptions & Exclusions• Chances of success???

Unemployment Insurance

• $2.4 billion debt to federal government – whose debt?

• How to repay debt• How to prevent this happening again• Annual v quarterly repayment of benefits• Surcharge on taxable payroll• Will be addressed this session

What Else?• Contingency Fee Audits• Electronic public notices• Electronic gaming oversight• ABC privatization

What Else?

• Pretrial Release• ETJ• Hydraulic Fracturing

(Fracking)• Water Supply

NCACC Budget & Tax Survey

Survey Results Overall• Slight improvement in county budget

environment– 69 counties reported budget increases– 50 counties reported increasing school

funding• Property values exceeding market growing

concern• Loss of lottery dollars backfilled with

county fund balances

2009 2010 2011 2012 2013$9.4$9.6$9.8

$10.0$10.2$10.4$10.6$10.8$11.0$11.2

N.C. CountiesBudgeted Expenditures

Bil

lio

ns

Real Property

Sales/Assessment Ratio > 100%

Total = 67

Max = 1.42

Total >110% = 16

Total >115% = 11

New This Year?

• Capturing charter ADM to factor current expense per pupil

• Document pre-trial release programs & animal control management

• Looking at employee retention, retirement rates

• Assessing major revenue & services challenges

County Funding of Schools• Current expense avg = $1746 per student

– $1,685 with charters– $1,730 in 2012

• Loss of state lottery funds—county actions– 64 dedicate to debt service; 51 pledge 100%

to debt service– 26 use county fund balance, 14 reduce

funding to other programs, 39 delay or cancel school projects

Pre-Trial Release

Preparing for the Future• Baby boomer retirement?

– 8% avg turnover rate• 61 reporting same in past 5 years• 4 increased• 9 decreased

– Positions impacted?• Child welfare• Jailers, LEOs

– Anticipate retirement?• <5% - 20 counties; 5-10% - 29; 10-25% - 24;

>25% - 6

Pending Retirements?

Governing in the New Normal

• Revenues improving but…– 70 counties concerned with stagnant revenues– 45 counties concerned with over-reliance on property

taxes– 51 counties concerned with declining market value of

property tax base

• New revenue sources?– Sales tax

• Expand base to services

– Sweepstakes

Governing in the New Normal

• Spending pressures from:– 56 counties reported stagnant salaries & benefits– 50 counties reported rising demands for services

• Emphasis on social and human services in response to economic climate

– 40+- report backlog in capital, maintenance, equipment

Recent Court Case

Lanvale Properties v Cabarrus County

• Recently decided by NC Supreme Court• Cabarrus County AFPO• Required developers to pay a school

impact fee• Court invalidated; county does not have

authority

Questions / Comments

Thank You!