Senate budget permanently ends county Medicaid share

The budget proposal adopted by the N.C. Senate on May 31 included the strongest statement yet that the General Assembly intends to permanently end the county Medicaid share. The proposed budget included the following provision that detailed the General Assembly’s intent to end the state requirement that counties pay 15 percent of the nonfederal share for Medicaid services by July 1, 2008.

More on Medicaid relief

MEDICAID COUNTY SHARE RELIEF
SECTION 6.16. In recognition of the increasing cost of Medicaid services and the burden this places on county finances, it is the intent of the General Assembly to develop a method for relieving counties of the county share of the nonfederal share of Medicaid expenditures. It is the further intent of the General Assembly that this relief will be in place by July 1, 2008. Methods being considered will allow counties to use those funds the counties would otherwise spend on Medicaid to support improvements in education at the local level without limiting the State's ability to provide critical State-funded services, including education.

“The Senate has said all along that they want to find a permanent solution to this crisis, and we appreciate their diligence in working to come up with a way to relieve counties of this unfunded mandate,” said David F. Thompson, executive director of the NCACC. “We know they are putting a lot of thought into devising a strategy that will be the best for everyone.”

The House’s budget proposal adopted earlier this month included $100 million in Medicaid relief for 2007-08. Members of the House have also expressed a desire to find a permanent solution to the county Medicaid share.

Counties across the state are in the process of adopting their budgets for 2007-08. State law requires that counties have their budget finalized prior to July 1. Without any Medicaid relief, North Carolina counties are projected to spend at least $517 million on Medicaid services costs in 2007-08, an increase of nearly $100 million since 2005-06.

A 2006 survey by the N.C. Department of Public Instruction revealed approximately $9.7 billion of school capital needs over the next five years to handle the state’s rapidly growing population and to accommodate mandates for smaller class sizes in the lower grades. The U.S. Census Bureau projects North Carolina to be the nation’s seventh-most populous state by 2030 with more than 12 million citizens.

“Our preliminary research indicates that as many as half the counties in the state are facing property tax increases next year to keep up with the rising cost of Medicaid and our ever-increasing school population,” said Thompson. “Relieving counties of the Medicaid burden will be the best thing the state can do to help us meet these critical infrastructure needs.”