Download - Winter 2014 NCACC Legislative Update
REBECCA TROUTMAN
NCACC IGR DIRECTOR
Legislative and Statewide
County Issues Update
Final State Budget, Finally!
County Impacts:
• $100 million lottery funds for county school capital– Can’t pledge for future debt service
• $13.7 million for county child welfare enhancements & increased state oversight
• What was left out?– NO non-emergency Medicaid transport outsourcing
– NO workers’ comp & tort claims shifts
– NO forestry services increase
– NO tier-1 limitation on state-funded school nurses
Final State Budget, Finally!
County Impacts:
• Phase out of Medicaid $500,000 benefit
– Not Medicaid hold harmless
• All misdemeanants to county jails under voluntary Statewide Misdemeanant Confinement Fund
Final State Budget, Finally!
Statewide Impacts:
• 7% avg. teacher salary increase; $500 non-certified & central admin.– TAs largely intact
– Tenure going forward eliminated in last year’s budget
• $1,000 to state & community college employees– 1% state retiree COLA
• Medicaid provider cuts but little change in Medicaid services or eligibility– Medicaid reform postponed until next session
Final State Budget, Finally!
Statewide Impacts:
• $2.2 million for mental health community-based crisis services
• $10 million for film industry grant program
– Allows sunsets of film & historic rehab tax credits
• $20 million for Job Catalyst program
– Spending authority embedded in local sales tax bill
• SBI transfer to DPS
– Crime lab remains with Justice
End of Session Surprise FailsH1224—Senate PCS, Local Sales Tax For Educ./Econ. Dev.
• Original pcs eliminates ¼ cent general purpose & replaces with ½ cent educ. and/or transit in ¼ cent increments– Cap combined county sales taxes at 2.5%
• Grandfather in Durham & Orange at 2.75%
• Mecklenburg unable to move forward with Nov. ¼ cent
• Senate adopted version keeps general purpose & increases to ½ cent, offers new ed. option at ½ cent & increases transit to ½ cent—either or in ¼ cent increments– Cap combined sales taxes at 2.5%
– Companion H189 permits Mecklenburg & Wake until 2016 to keep 2.75%
• Senate ties econ. development, teachers’ asst. tech fix to measure
• House fails to concur
NCACC County Goals Checklist Support farmland preservation
– $1M for military buffers
Monitor & protect counties in natural resource extraction– Limit on property taxes turned back– Study of mineral valuation for property taxes
*Ensure mental health funding– $2.2M in community crisis services
Retain NEMT– House budget provision rejected
Preserve county HHS fed. funds– No service cuts– Add. funds for CPS
Increase childcare subsidies & Pre-K– Add. funding for slots & rate increases– Tightening of eligibility requirements
*Oppose transportation shifts– No legislation introduced
Allow county participation in state health plan– Montgomery County added
Support full funding of JRA– Creates facilities to house probation violators
Provide state crime lab funding– Initiates Western Crime Lab & forensic DNA
Remove pop. threshold for detention space limitations– S463 enacted
*Reinstate lottery funds– H1107 introduced with 70 house members– Maintained at current levels
Maintain state responsibility for school buses & tort claims– Gov. proposal to shift tort claims rejected
Support community college workforce pgm– $15.1M recurring for health & tech ed pgms
*Oppose unfunded mandates & cost shifts – No new mandates or cost shifts
*Preserve existing tax base– No loss in revenue base
Centralize appraisal of wireless & cable facilities– H1050 shifts wireless appraisals to DoR
Other Legislation Impacting CountiesH1195 - Pension Spiking, Collins & Ross• LRC House Committee on Retirement
– NCACC & NCLM crafted with Retirement Div. & NCCCMA retirement committee
– Goal to preserve pension fund fiscal integrity w/out impacting valid salary increases or promotions
• Sets contribution-based benefit cap triggered by excessive salary increase & imminent retirement– Only applies to state & local employees >$100,000 retiring Jan 2015 or later
• Salary does not trigger cap; excessive salary MAY trigger cap– Retirement Div. to report names who MAY trigger cap if retire w/in year
• Notice contains estimated liability owed if cap trigger• Consequences if cap triggered?
– Reduced pension; New employee pays liability; Gov’t entity to pay for existing employee (can be shared locally with employee)
• Bill also provides for non-vested contribution returns with interest & resets TSERS vesting to 5 years
Other Legislation Impacting CountiesH1043 - P&C Prequalification, Arp
• P&C study committee from NCACC-sponsored Design Build legislative goal– Wake County Commissioner Paul Coble county rep
• H1043 requires lgs to adopt prequal policy & prequal assessment tool & limits for construction at risk, design-build, PPP
• Establishes Blue Ribbon Comm. to Study Building & Infrastructure Needs of State– Includes water & sewer, community colleges and schools
– Study infrastructure needs thru 2025, priority process for needs, feasibility of fund with dedicated revenue & funding options until 2025
Other Legislation Impacting Counties
S403 Omnibus Elections Clarifications
• House floor amendment to limit special elections, e.g. for sales tax or bond referenda, to elections having all precincts open, e.g. non-municipal, odd-years
Other Legislation Impacting Counties
H292 – Moratorium on Lawsuits for School Funds PCS
• Prohibits schools for suing over sufficiency for 2 years
– Applies only to Union, Gaston & Nash
Update—Union County appeal heard in Court of Appeals 12/2
NCACC files amicus brief
Other Legislation Impacting Counties
H369 – Criminal Law Changes
• Clarifies that local government assurance of E-Verify contractor/subcontractor compliance only applies to formal bid threshold for purchases & construction
– Aligns county & city requirements with all state & public agencies
Other Legislation Impacting Counties
H1050 Tax Reform• Tweaks tax simplification act of last summer• Major impact is to cities—privilege licenses
– Reinstates inadvertent repeal– Limits application in 2014-15 to physical presence– Repeals in entirety in 2015-16 without replacement
revenue
• Sets LPA fees at $1.06 & makes increase retroactive to March
• Authorizes DoR to centrally appraise wireless facilities & towers (NCACC goal)
Other Legislation Impacting CountiesH1031 – Econ. Development Partnership
• Permits Commerce to outsource certain econ develop. functions– Recruitment, retention, business development,
international trade, marketing & travel & tourism
• Does not distribute incentives
• Establishes 8 regional prosperity zones to house reps of state agencies for better collaboration & coordination
Statewide Environmental IssuesS734—Reg. Reform• Rejects House’s plans to limit county or city zoning
authority for design controls or to amend misconduct, negligent definition of code officials to include enforcement of more stringent building code
• Includes enforcing county floodplain ordinance in ETJ
• Repeals moratorium on local environmental ordinances
• Enables permit applicant to choose version of rule or ordinance during permit application period if rule or ordinance changes
• Standardizes local well permitting & inspection forms
Statewide Environmental Issues
S786--Energy Modernization Act• Repeals prohibition on permit issuance for fracking & allows issuance 61
days after all rules adopted—July 1, 2015• Extends deadline for rule adoption to Jan. 1, 2015
• Establishes Oil & Gas Commission to oversee oil & gas exploration• Makes confidential trade secret info but requires immediately disclose to
first responders• Sets responsibility for well contamination at ½ mile (was 5000 feet)• Preempts local ordinances that would prohibit or cause to prohibit oil &
gas exploration• Establishes state severance tax on energy minerals & prohibits local taxes,
excluding property taxes• NCDoR charged with studying other states’ practices on valuing energy materials for property taxes• JLOC Energy Policy to study how industry development impacts property tax revenues
Statewide Environmental IssuesS729--Coal Ash Management• Sets clean-up/remediation/closure requirements by dates
certain for state’s 33 coal ash ponds, based on DENR evaulation of severity– High-priority to have materials removed by 8/1/19 include facilities in
Rockingham, Gaston, Buncombe, & New Hanover– Other high risk ponds may convert to industrial landfills but remediation
must occur by 12/31/19– Intermediate by 12/31/24– Low by 12/31/29
• Prohibits new or expanded ponds & requires groundwater monitoring
• Preempts local regulation of coal ash management
What Was Left? - Medicaid Reform• Structure of service delivery?
– Senate favors MCOs regionally competing with ACOs• All clients under full risk capitation by July 2018
– House, Gov., & medical community only support ACOs• Most clients under increasing risk capitation by July 2020
• Structure of oversight?– Senate favors new dept. with board of directors
• Senate wants study of eligibility determination options
– House & Gov. keep within NC-DHHS• House wants director approved by legislature
• HHS subcommittee (in split vote) endorses outsourcing risk within 3 years w/ preference to provider-led organization—full committee rejects
• PED subcommittee favors independent board administratively w/in NC-DHHS
Looking Forward2015-16 County Legislative Agenda
In Development
19
NCACC Legislative Goals Process
October
Goals Referred
to Steering
Committee
Steering Comms.
Consider & Recommend
Goals Referred to Legislative
Goals
Comm.
Legis. GoalsComm.
Considers & Recommends
Goals Referred to Board of Directors
Board Considers
& Approves Goals
Goals Referred
to Member
County Boards
New BoardsTake Office,Consider &
Select Delegates
Delegates ApproveGoals at
Legis Goals Conference
Nov 19-20
December January 15-16, 2015
July - Sept
December 10
Commissioners
& Boards
Submit
Proposed Goals
358 Total Goals Submitted44 to be voted on at Legislative Goals Conference
Committee Consideration
• Economic development front & center; 22 of 55 goals in Tax & Finance
– Uncertainty with new economic development structure
– Concern by rural counties
– Focus on expiring incentives, infrastructure
• Concern with tax base erosion
– Study of non-profit property tax exemptions
22
Top T&F Goals Thus Far
23
1. Oppose unfunded mandates and shifts of state responsibilities to counties.2. Grow North Carolina’s statewide economy through sound state investments,
including public infrastructure funding, competitive incentives, andcoordinated efforts with county economic development services.• Adopt new approaches to economic development incentives to include
rural counties.• Restore the film and historic preservation tax credits.• Provide increased grant funding for rural infrastructure projects.
3. Preserve the existing local revenue base.4. Authorize local option revenue sources already given to any other
jurisdiction.5. Expand local option sales tax by allowing for Board of Commissioners
resolution or public referendum.
Other County Priorities
• Oppose roads, Medicaid cost shift, encourage broadband
• Increase state funding for lottery, libraries, environment & ag programs
• Increase e911 fee flexibility
• Support Medicaid expansion & keep mental health public
24
Looking ForwardKey Statewide Issues
25
Pension FundLGERS Fund Stabilizing
• New financial reporting shows net assets
• Employer contribution to fall
• Investment gains support small COLA
• Retirement division/actuary recommend setting 5-year ARC (annual retirement contribution)
NCACC Board Adopts NCCCMA Recommendations
Managers’ assoc. retirement committee recommends:
• Set ARC at levels to support future 5-year rate
• Support COLA commensurate with investment gains
• Request staff to define 1,000 rule
State of the State(Barry Boardman)
• 2013-14 = $450 million shortfall– Personal Income tax collections the key reason
• 2014-15 ytd = General Fund revenue $145 million under target (down 2.2%)– Sales Tax collections were $59 million above target
• 5.7% baseline growth
– Personal Income collections were down $178 million
– Total Tax revenue down $131 million
Little Change In State Forecast
Sales Taxes Improving….but
Local distribution ytd = 8.9%
Legislative Session 1/28
• Governor’s 2-year budget due late Feb.
– Requires consensus revenue forecast with NCGA
– Focus on infrastructure?
– Offer up Medicaid expansion?
– New budget director
• Lee Roberts, former banker, Cokie Roberts’ son
• State tax revenues?
– Unknown until April 15
Legislative Session 1/28(Organization Session 1/14)
• New House leadership
– Committee chairs unknown
Rep. Tim Moore (Cleveland)
Speaker of the House
Rep. David Lewis (Harnett)
Rules Chair
Rep. Mike Hager (Rutherford)
Majority Leader
Key Legislative Issues?
• Tax Reform 2.0?
– Shift in local sales tax allocation?
– Expansion of sales tax to services?
– Replacement for municipal privilege license taxes?
• Medicaid Reform & Expansion?
– House/Senate differences remain
Questions?Comments?