N.C. Government Finance Officers’ AssociationSummer 2012 Meeting

Government Relations Update

Rebecca Troutman, NCACC IGR Director

Budget & Beyond…Legislative Hot Topics for Counties

• State Budget• Human Services

Flexibility • County Broadband

Grants

• NCACC Legislative Goals• Statewide Tax Reform• 2013 Tax Rate Survey

• Contingency Fee Audits• Fracking• LME Governance• Court Cases of Interest

Looking Back

Looking Ahead

State Budget Impacts to Counties

H950 & S187

State Budget H950 Overall• $20.2 B total

– $230 M > 2012-13 certified– No new taxes, fees; increase per over-

collections, reversions, special fund balances– Year-end general fund base revenue growth

at 6.2 % declines to 4.3% in 2012-13– Most excess dollars to Medicaid– 1.2% salary increase & 1% retiree COLA

• UNC opt for defined contribution• S187 Tech Amend adds 5 days leave

H950 Education Impacts• Sets county lottery funds at $100M

– Allocates per pupil– Statutory allocation if any overage

• Increases K-12 funding by $143.2 M to reduce flexibility cut to $360 M total

• 1.2% teacher salary increase—no flexibility in use

• Includes some components of Senate’s “Excellent Public Schools”

H950 Education Reforms• Reading literacy concentration• No automatic promotion

– Must read at grade level in 3td grade or retained• Schools must publish literacy success/failure

& A-F grades• NC Teacher Corps

– In lieu of Teaching Fellows– Recruit & place college grads & mid-career

H950 Health & Human Services• Adds $9 M for local psych bed additions &

expands capacity in Broughton & Cherry• Cuts community mental health by $20 M nr• Adds $4.9 M nr for county health depts. for

health & wellness activities• New $ contingent on Medicaid funding

sufficiency• Budgets $4.4 M for guardianship transition

H950 Health & Human Services

• 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

H950 Health & Human Services

• 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

H950 Health & Human Services• Restructures State/County Special Asst. In-Home

program, effective Feb. 15, 2013– All counties must participate (9 do 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

H950 Health & Human Services

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

transportation system prior to RFP

H950 Natural & Economic Resources

• Staffs Mining & Energy Commission• Restores DENR regional offices• Funds Clean Water & Drinking Water• Clean Water Trust Fund appropriations

reduced to $10.8 M & made nr

H950 General Government & Transportation

• No add. funds to draw down federal HAVA– Does require vendor maintenance certification

of county tech. staff• DoT to prioritize paving unpaved roads• Provides personnel for combined vehicle

registration/property tax system• S187 delays new/increased ferry tolls 1 yr • Caps gas tax for 1 yr

Legislation of County Interest

Local Human ServicesAdministration (H438)

Key Elements:• Provides option to all boards of commissioners

to restructure human services– Under BOC or create consolidated human services

board• Current law only permits counties with pops. >425,000 to

restructure• 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

Local Human ServicesAdministration (H438)

• BOC may consolidate health or DSS agency or both– Under manager’s supervision– Employees under SPA or not

• To receive fed. & state funds, as of 7/1/14, counties must:– Maintain county health AV funding at 2011 levels– Have health depts accredited (current req.)

• Creates incentives for regionalism

County Broadband Grants (S572)

Key Elements:• Authorizes any county to enter

public/private partnerships for broadband investments– Grants to expand service to unserved areas– Only to qualified providers & via public notice

• Counties can only use unrestricted general fund revenue for grants

Contingency Fee Audits (H462 & S847)

Key Elements:• Prohibits contingency fee contracts for 2

years, beginning July 2013• Prohibition sunsets July 2015• Legislative leadership agrees to study

audits– Scope, use, impacts, problems

• Flat fee, hourly fee audits continue

LME Governance (S181)

Key Elements:• Limits area board size 11-21 by 10/2013• Prescribes 10 board categories

– Consumer/family, expertise in managed care organizations across legal, financial, and services disciplines

– Composition to represent participating counties• Boards of county commissioners make appts.• LMEs >= 1.25 M pop flexibility for board

size/compensation

LME Governance (S181)

Key Elements:• Area board members subject to attendance,

training requirements• Single county authorities no longer under county

financial control• Counties precluded from leaving LME for 2 yrs,

pending DHHS rules• Assigns public guardianship solely to county DSS

– Transition funding in budget– Study via tech corrections

Fracking (S820)Key Elements:• Creates Mining & Energy Commission

– 1 voting county member apptd by President Pro Tem

– Charged with developing regulatory program for oil & gas exploration

• Authorizes fracking but no permits pending subsequent legislative action

• NCACC, NCLM & NER develop recs re local regulations– Set backs, placement, light & noise restrictions

– Can’t have effect of prohibiting fracking

Other Legislative Issues of Interest

• H925 – Annexation Reform– Result of Litigation

– Replaces petition process with referendum by registered voters in the “to-be-annexed area”

• H5 – Local Deannexations– County Zoning Fix: H1169– Allows a County, by ordinance, to reinstate

zoning prior to the annexation

Other Legislative Issues of Interest

• Sweepstakes – H1180 (not enacted)– Counties have no express authority to assess

privilege licenses or other fees– Supreme Ct. to rule

• Pretrial Release – S756 (not enacted)– Proposed waiting period before PR/arrestee

contact• Justice Reinvestment Act

– $21 M fund; $3.9 M spent

Court Cases of County Interest

Charter Schools

Sugar Creek Charter School v. Nash County (Sugar Creek II)

• Supreme Court denied Petition for Discretionary Review

• COA decision stands• Current statutory provisions preclude

charter schools from seeking capital funds

Penalties/Forfeitures• Richmond County Board of

Education v. Janet Cowell, et. al. • Complaint for Declaratory Judgment• Challenges $50 improper equipment

fee going to SMCF as cost of criminal action

• Asks court to declare penalty and redirect to school board

Williams v. Pasquotank

• May 3, 2011 COA unanimous opinion - when considering whether governmental immunity applies to a function of government, the task being performed “is proprietary and private when any corporation, individual, or group of individuals could do the same thing.”

• Supreme Court arguments - awaiting decision from Supreme Court

Looking Forward

NCACC Legislative Goals

• All counties asked to submit goals thru Sept. 17– NCGFOA to “brainstorm” needs

• 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)

Sept - 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 2013Dec

General Assembly Convenes Jan. 2013

July - Sept Nov

2013 Statewide Tax Reform

• Legislative commitment to reform NC tax structure

• Legislative leaders invite proposals for property tax reform, sales tax reform

• Conversation may include shift of responsibilities, authority

6 – number of open Senate seats created by redistricting

9 – number of Senators retiring, primary loss

12 – number of Legislators seeking higher office

14 – number of open House seats created by redistricting

24 – number of Representatives retiring, primary loss

42 – number of new faces in 2011-12

~50 – total number of potential new faces for 2013-14

Retirees include Owens, Justice, Stevens, Hackney, Brubaker, McGee, Folwell, Garrou, Purcell

A Challenge for Counties– Preparing for the 2013-14

Legislative Session

2012-13 County Tax Rate Survey Rates

Rate Changes Sales Assess Effective

Avg $0.6208 Avg increase $0.0352 104.5% $0.6396

Avg decrease ($0.0117)

High $1.0300 $0.0600 142.4% $1.1418 Low $0.2790 ($0.0300) 88.1% $0.0000

Summary of Actions SA above 100% Increases = 11 Total = 67 Decreases = 15 Max = 1.42 No change = 73 Total >110% = 16 Interim = 1 Total >115% = 11

100

Questions / Comments

Thank You!