NCACC Board of Directors continues discussion on Medicaid relief proposal

By Jason King
Information and Communications Specialist

Sen. Tony Rand told the Board he's open to hearing alternate proposals on Medicaid relief. (Photos by Jason King)

The NCACC Board of Directors discussed but took no action Feb. 16 on a proposal that would end county participation in financing the state share of Medicaid.

The proposal, originally developed by Senate Majority Leader Tony Rand of Cumberland County, calls for counties to return 1 cent of their sales tax authority to the state (the Article 39 sales tax) in exchange for the state assuming all non-federal Medicaid services responsibility. In addition, the General Assembly would grant counties the authority to enact by resolution an additional 1 cent sales tax to replace their lost revenues. The net effect for each county, upon implementation of the additional 1 cent sales tax, would be the elimination of its Medicaid burden.

The county Medicaid share is projected to be $488 million in 2006-07 and, at the anticipated national growth rate of 8.6 percent, could eclipse $1 billion within the next 10 years.

“If you see what it has done over time, you know that this thing is going to eat you alive at some point. It’s going to get you. It’s going to get us all,” Rand told the Board. “The poor counties are going to be faced with raising their property taxes even more. That just accentuates the unfair nature of where we are.”

Durham County Manager Mike Ruffin presented the Board with a number of options that the NCACC County Manager and Finance Officer Medicaid Relief Task Force considered before recommending the proposal to two NCACC steering committees and the Board of Directors.

Durham County Manager Mike Ruffin served as a member of the NCACC County Manager and Finance Officer Medicaid Relief Task Force.

Ruffin said that task force held fast to its belief that it will be difficult for the state to assume county Medicaid costs without a revenue stream.

With that in mind, the task force examined a number of revenue streams that could be offered to the state as an inducement in a “trade” for permanent Medicaid relief, such as the public school building capital (ADM) fund, lottery proceeds, motor vehicle property taxes, and the sales tax.

Any proposal under consideration had to meet certain criteria: it couldn’t endanger county fiscal health, needed sufficient funds to entice the state to consider it, and had to hold cities and schools harmless. The task force projected that its proposal would save counties $25.5 billion over a 20-year period.

“We have counties where the unemployment rate goes up and they don’t have any money,” Rand said. “Their Medicaid match is just eating them alive, and they can’t take care of their schools, they can’t take care of their community colleges, they can’t take care of anything.

More on Medicaid relief

“It’s unfair for you to foot some of the bill because you don’t have anything to do with the design of the plan.”

The Human Resources Steering Committee voted Feb. 14 against accepting the proposal as is, but voted to support it if a menu of revenue options could be added to the package.

Revised Medicaid estimates bring good news for counties

The General Assembly’s Fiscal Research Division had some welcome news on Medicaid to report in February. Due to a number of cost-cutting measures enacted by the Legislature in this year’s budget, county Medicaid expenses for 2005-06 should be $5.3 million less than anticipated.

The Department of Health and Human Services estimates counties will spend $460 million on Medicaid during the current fiscal year. Revised Fiscal Research estimates for the 2006-07 fiscal year put the county Medicaid share at $488 million.

Director of Communications Todd McGee and Director of Research and Public Technology Rebecca Troutman contributed to this article.