County efforts rewarded in budget

County officials' push for state funding pays off on criminal justice issues, mental health

• President's Perspective: State budget sees to county concerns

By Rebecca Troutman
Intergovernmental Relations Director

The General Assembly approved its spending plan for 2008-09 on July 8 after two weeks of conference deliberation and compromise. The adopted modifications to the 2007 Appropriations Act contain a number of appropriations and special provisions that are both important and advantageous to counties. County commissioners and county staff from around the state have pressed for legislative resolution on many of the issues, and the General Assembly appropriately responded to county advocacy efforts.

A special provision directs that $140 million of lottery revenues be distributed to counties as they were in 2007-08 (based on the Average Daily Membership formula, which officially determines the number of students in a school system): 65 percent will be distributed to all counties, while 35 percent will go only to counties with effective tax rates above the statewide average. An additional $14.2 million of the total $154.2 million in lottery proceeds appropriated for school construction would go to counties whose effective tax rates fall below the statewide average. Another special provision sets aside for school construction purposes any lottery revenues in excess of 2007-08 appropriated levels for all educational purposes. The Office of State Management and Budget anticipates that excess to be in the range of $12,000.

The budget includes several items of priority to the NCACC: elimination of the unfunded mandate that counties pay for courthouse telephone systems operations, maintenance and enhancements; restoration of recurring funding for the Criminal Justice Partnership Program and the Juvenile Crime Prevention Councils; and additional funding for mental health services.

The budget references two areas of special significance to North Carolina and details what actions address these areas. State support of military personnel recognizes the state's military heritage and provides funding for National Guard pensions, tuition assistance and armory rehabilitations, in addition to other support. State housing support provides funding in excess of $14 million to prevent housing foreclosures and provide supportive housing opportunities.

As a part of the state support of military personnel, the budget increases the homestead exemption for disabled veterans from $38,000 to $45,000. Other tax changes include increasing the earned income tax credit to 5 percent, effective Jan. 1, 2009, and creating an ENERGY STAR appliance sales tax holiday the first weekend in November. The budget also repeals the "gift tax" effective Jan. 1, 2009, exempts baked goods from sales taxes, prohibits sales taxes on interior design services, and clarifies nonprofit sales tax refunds.

Teachers will still receive an average increase of 3 percent. Teachers at steps 0-2 receive a $680 flat increase, while all others receive $470. Principals would receive on an average a 2.69 percent increase, and university and community college faculty would see a 3 percent increase. All other state employees would receive the greater of a 2.75 percent increase or $1,100. State retirees receive a 2.2 percent cost of living.

In addition to the budget, the Association was following a number of items of significance to counties as the session wound down. A comprehensive look at these bills and how they impact counties will be posted online following the session's end.

The following items in the budget provide significant resources to counties or respond to those issues of concern raised early in the budget process.

Mental Health

• $60 million in additional state resources are directed at improving local crisis and state psychiatric services. In particular, additional mobile crisis units, walk-in crisis centers and local hospital psych beds should spur local capacity and response. No additional funds are provided for substance abuse services, but a special provision directs $8 million to regionally purchased, locally hosted services.
• Special provisions strengthen the management capacity of the local management entities (LMEs), directing DHHS to develop a plan to return service authorization and utilization review to nationally accredited LMEs, and directing DHHS to study waivers or other flexibility measures to foster LME innovation. DHHS must develop a plan for LME merger for General Assembly review if it desires merger, and no merger could occur prior to July 1, 2010, except for LMEs not meeting catchment area population requirements, and the merged administrative services by Guilford, Mecklenburg and Smoky Mountain.
• Special provisions likewise strengthen DHHS oversight of LMEs by shortening the time of technical assistance to address performance failure.
• Funding reductions and special provisions reign in community support services, a much maligned wrap-around service that was found fraught with cost overruns and frivolous programs.

Criminal Justice and Public Safety

• Restores annual funding of $22.7 million for Juvenile Crime Prevention Councils (JCPC) with $500,000 in additional funding.
• Restores annual funding of $9.2 million for the Criminal Justice Partnership Program (CJPP) with $258,000 in additional funding.
• Repeals a special provision requiring counties to assume funding for court telephone equipment and operations, saving counties $3.4 million annually; state costs offset by a $1 increase in court facility fees.
• Appropriates $10 million for gang prevention (H274) and funding for improved gang reporting.
• Provides three new prosecutors, four new deputy clerks, three new judges and 10 new magistrates.
• Appropriates $5 million for a statewide crime analysis system, which will be piloted in Wake County.

Human Services

• Appropriates $4.8 million for county health departments.
• Increases daycare subsidies to serve more than 1,100 additional children.
• Increases the foster care standard board rate to incent and retain a county developed foster care family network; holds counties harmless for increased costs associated with foster care payment and rate changes for foster placements as of Jan. 1, 2009.
• Increases state county special assistance monthly care rate as of Jan. 1, 2009 – costing counties $2.9 million.

Public Education

• Fully funds community college enrollment increases ($23.8 million) and provides $10 million for allied health, technical education and additional equipment funding.
• Provides $15 million in dropout prevention grants, $10 million for school connectivity, $6 million in disadvantaged student funding, and $2.9 million in low-wealth counties supplemental funding.
• Increases ADM allotment for Academically Gifted and Children with Disabilities.
• Expands More at Four funding by $30 million.
• Increases school bus fuel allocations by $35 million.

Natural and Economic Resources

• Provides $50 million in Rural Center water, sewer and natural gas grants and $4 million to expand the Economic Transition program.
• Provides $8 million in state matching dollars for clean water and drinking water federal programs.
• Provides $15 million in additional JDIG funds, $5 million for One North Carolina, and additional funding for small and green businesses.
• Provides $50 million in certificate of participation (COPs) funding for land conservation, and appropriates $4 million for farmland preservation.

Transportation

• Appropriates reserve funds to begin development of combined motor vehicle property collection and registration automation.
• Reduces the Highway Trust Fund transfer by $25 million and reallocates dollars for the Triangle Expressway toll road project.