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N.C. Government Finance Officers’ Association Summer 2012 Meeting Government Relations Update Rebecca Troutman, NCACC IGR Director Budget & Beyond…Legislative Hot Topics for Counties Looking Back • State Budget • Human Services Flexibility • County Broadband Grants • • • • Contingency Fee Audits Fracking LME Governance Court Cases of Interest Looking Ahead • NCACC Legislative Goals • Statewide Tax Reform • 2013 Tax Rate Survey 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 overcollections, 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 Services Administration (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 Services Administration (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) Counties Submit Proposed Goals Goals Referred to Steering Committee July - Sept Steering Comms. Consider & Recommend Goals Referred to Legislative Goals Comm. Sept - Oct Legis. Goals Comm. Considers & Recommends Nov Goals Referred to Board of Directors Board Considers & Approves Goals Dec Delegates Approve Goals at Legis Goals Conference New Boards Take Office, Consider & County Boards Select Delegates Goals Referred to Member Dec Jan 2013 General Assembly Convenes Jan. 2013 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 A Challenge for Counties– Preparing for the 2013-14 Legislative Session 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 2012-13 County Tax Rate Survey Avg Rates $0.6208 High Low $1.0300 $0.2790 Avg increase Avg decrease Rate Changes $0.0352 ($0.0117) $0.0600 ($0.0300) Summary of Actions Increases = Decreases = No change = Interim = 11 15 73 1 100 Sales Assess 104.5% Effective $0.6396 142.4% 88.1% $1.1418 $0.0000 SA above 100% Total = 67 Max = 1.42 Total >110% = 16 Total >115% = 11 Questions / Comments Thank You!