FOOD FOR THOUGHT

Since 2000, county Medicaid costs have increased on average 96 percent. Wake County has had the largest growth during that span with an increase of 144 percent.

SUPPORT FOR TARGETED MEDICAID RELIEF, LAND TRANSFER TAX GROWS

Association staff began meeting with leaders in the House and Senate this week to float the Medicaid relief/infrastructure plan discussed and approved by the Board of Directors last month. The plan called for targeted relief for counties hardest-hit by the Medicaid burden, a permanent cap at 2005-06 levels to help all counties, and a local-option land transfer tax to help rapidly growing counties with their infrastructure needs. Leaders in both chambers expressed support for state-funded Medicaid relief for low-wealth counties and giving counties a local-option land transfer tax, but remarks about the prospects of making the temporary cap of county Medicaid costs a permanent cap at 2005-06 levels were not encouraging.

COUNTY COALITION CONVENES FOR INAUGURAL MEETING

The General Assembly's County Coalition held its 2007 inaugural meeting March 1, welcoming new comers William Brisson and Ruth Samuelson to their fold. This informal body, made up of former county commissioners who now serve in the General Assembly, meets periodically with Association staff and acts as a sounding board for county issues being considered in the Legislature. Co-chaired by Becky Carney and Carolyn Justice and entering its third year, the County Coalition discussed the Medicaid Relief/Infrastructure plan that would help all counties with their most pressing needs, namely spiraling Medicaid costs and accelerating infrastructure demands. Given the growing importance of statewide infrastructure needs, the coalition will invite former city council members who are now legislators to its next meeting.

APPROPRIATIONS OFF AND RUNNING

Wasting no time to start dissecting Gov. Easley's budget recommendations, the House and Senate appropriations committees and subcommittees have been meeting jointly all week to hear from the governor's budget staff about proposed changes in the state's tax and spending priorities. A major change this year is the budget document itself. No longer are legislators being overwhelmed with line-item detail. Instead, the results-based budget summarizes key goals and services by each division, performance measures for services, and prior, current and recommended changes in funding levels. In outlining near-future committee tasks, legislative staff noted that House and Senate members would continue to meet jointly over the next six weeks or so, and then go their separate ways to craft their individual spending plans. The House will be the first to offer up its proposal this biennium.

HOMESTEAD PROPERTY TAX RELIEF

At a special meeting on Feb. 28, the Association’s Tax and Finance Steering Committee met to learn about some of the proposed options that the General Assembly may be looking at for providing property tax relief. Many legislators are talking about the need to provide additional property tax relief for citizens who live in areas where there has been tremendous increase in property values during a revaluation cycle. The Association has adopted a legislative goal to study the “system for reevaluation of ad valorem property and its effect on low-income taxpayers.” The Association will push the Legislature not to make any drastic changes this session but to instead establish a study commission to examine the issue. Even so, legislators are expected to push to expand the current Homestead Exemption. Other possible solutions that may be looked at by the General Assembly are to require counties to revalue more often (currently counties must revalue once every eight years), to provide blanket exemptions for all property owners or to cap the increase in assessed value. Association policy calls for the state to reimburse counties for any lost revenue if “statewide policy objectives necessitate reductions in local tax bases.”