NCACC Legislative Update NC Local Government Budget Association Summer Meeting

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NCACC Legislative UpdateNC Local Government
Budget Association Summer Meeting
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2007-08 State Budget

• 1st Year of Biennium
• Governor proposes - House starts leg. budget
  process amends Senate amends House/Senate
  conference committee appointed
• H1473
• State spending under continuing resolution thru
  7/31
• Continues ¼ cent state sales tax

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2007-08 State Budget

• House/Senate Comparison
• 20.3 bil budget v. 20 bil
• fueled by 1.3 bil surplus
• 100M county Medicaid relief v. intent for
  permanent relief
• Recurring funds to non-recurring status
• Must undergo continuation review

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2007-08 State Budget

• House/Senate Comparison
• Temporary taxes remain v. taxes sunset
• ¼ sales in, upper income out?
• EITC for poor v.?
• EITC lite?

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2007-08 State Budget

• House/Senate Comparison
• State employees university faculty 4.25 v.
  4 5 Senate?
• Teachers 5 avg School administrators 4.44
  same
• Community college 5 same

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2007-08 State Budget

• Public Educationenrollment increases (26k more
  kids), Learn Earn, Education Access Rewards
• Gov Senate propose free tuition program for
  eligible students House concurs but uses less
  money
• Gov wants More at Four, House wants drop out
  prevention, Senate wants focused reform pilot
• At issue is school resource officers, DSSF,
  literacy coaches
• Study of school funding formulas
• Community Collegesenrollment increases in
  continuing, increase tuition by 6.3, provide
  planning funds for anticipated bonds

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2007-08 State Budget

• Human Services
• Gov House propose new NC Kids Care
• Senate scales back to study, 2nd year
  implementation lower eligibility
• Senate seeks Medicaid cost containment
• Agreement on increases in Heath Choice, day care,
  pandemic flu treatment, school nurses

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2007-08 State Budget

• Human Services
• Debating mental health funding oversight
• Both focus on community servicescrisis, housing,
  substance abuse
• Both requiring annual LME report on county
  funding (121 million)
• Senate reigning in community support servicesnew
  service busting county Medicaid cap
• 478 mil v. 427 mil 24 mil above 27 mil cap

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2007-08 State Budget

• Justice and Public Safety
• Senate increases court fees for 550 new
  positions recurring technology fund (8 mil)
• Counties responsible for telephone system?
• House largely follows gov. plan for 100
• Senate?
• VIPER
• House proposes only 508k for implementation, Gov
  requested 9.1 mil, Senate looking at 12.25 mil
• Special provision for cops funding predicated on
  funding stream
• 2.3 mil for recurring expenses in all
• Gang suppression intervention in both

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2007-08 State Budget

• Natural Economic Resources
• Continues One NC Fund 13 v. 14 mil
• Expands Rural Centers economic infrastructure
  program 19 mil
• Promotes film industry, viticulture, home
  furnishing market, NC Green Business
• Increases DoR administrative set aside from white
  goods scrap tire fees 200 k to 425 k

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Defining Issues

• County Medicaid Relief
• State and local infrastructure
• What it is, how to fund
• Limited state debt capacity v. pent up demand
• 10 bil schools, 7 bil water sewer, 65 bil
  roads, millions more for universities community
  colleges
• Focus on land transfer tax to target growth with
  statewide bond for poorer communities

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County Medicaid ReliefH1016

• Permanent, complete Medicaid reliefphased in
  over 3 years
• 25 10/1/07, 50 2008-09, 100 2009-10
• Counties cede ½ penny sales tax
• ¼ 10/1/08, ¼ 10/1/09 (Art. 44)
• Counties held harmless for 10 years
• Cities held harmless and receive growth
• Art. 42 per capita converted to point of delivery
  

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House Senate County Medicaid Relief

• H1016 preferred Medicaid relief strategy but.
• House wants additional local revenue authority
• .4 land transfer tax (4 x county deed stamp
  300 mil)
• ¼ cent sales tax 250 mil
• At county option by referendum

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2007-08 State Budget

• House and Senate conferees meeting round the
  clock
• Close to finalizingMonday should unveil
  conference report
• Medicaid sticking point

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Lottery in the Budget

• House/Senate appropriates 140 Million for school
  capital
• 170 mil budgeted in 2006-07
• 102 mil actual thru May anticipate 30 mil last
  qtr
• Special provision directs overage to be spent at
  discretion of budget director-i.e. state
  operating expenses
• 330 mil actual v. 450 mil budgeted
• Rejects Easleys call to change lottery
  allocations

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Lottery in Legislation

• H9-School Capital Fund Formula/Lottery Proceeds
  (passed House)
• 65 still by ADM
• 35 divided because?
• Mtn. legislators pushing ADM
• Change in tax rates3 in, 5 out
• 17.5 low wealth ( of low wealth funds)
• 17.5 growth in 5 years ( per ADM growth)

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Tax and Finance

• Attack on property tax base given escalating
  values
• Reflecting national trendse.g. Florida, SC
• Looking for study but agreeing to small increase
  in income
• H1499 reasonable compromise
• Moves income to 25 k (current at 20.5 k)

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Homestead Exemptions
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Appraisal Valuation Bills
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Property Class Exemptions
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Circuit Breakers, Deferrals, Misc.
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Other Legislation

• H24 Smoking in Public Places S.L. 2007-193
• Smoking in State government buildings prohibited
• Local governments may restrict smoking in public
  places in
• Buildings owned, leased and occupied by local
  government
• Building and grounds wherein local health
  departments and departments of social services
  are housed
• Public schools, school facilities, on school
  campuses, at school-related or school-sponsored
  events, in or on other school property, public
  school buses, or at day care centers.
• Any place on a public transportation vehicle
  owned or leased by local government and used by
  the public.

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NCACC Website

• Financial comparisons
• Legislative updates
• Links to counties
• Links to state resources

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Questions Comments