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!