Agenda - 09-20-2007-2b - Laserfiche WebLink

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Message Donna Coffey Page 1 of 7 ~~ac~n me.n ~- ~ - ~ From: Rebecca Troutman.[rebecca.troutman@ncacc.org] Sent: Tuesday, August 21, 2007 12:23 PM To: County-Managers; County Finance Officers Cc: NCACC-Legislative Subject: NCACC 2008 State Budget Analysis Dear Managers, Finance Officers, and Budget Officers, Please find following the Association's synopsis of the 2008 state budget, highlighting county impacts. Rebecca Troutman, Intergovernmental Relations Director NCACC 919.715.4360 After 8 weeks of continuous negotiation largely centered on county Medicaid relief and additional county revenue authority, the House and Senate agreed to the budget conference report on H1473, adopting the state's 2007-08 $20.7 billion budget on July 30, 2007, with a signing by Governor Easley the following day. The budget provides for athree-year phase-out of county Medicaid expenses in exchange for a gradual assumption of a half-cent local sales tax. In the first year alone, counties will enjoy more than $86 million in Medicaid relief, with $19 million in additional state aid to guarantee that all counties receive at least $500,000 in benefits under the plan. To help offset some of these new state costs in the first year, the General Assembly is withholding roughly 50 percent of the Public School Building Capital Fund (ADM Fund).for 2007-08 only. Counties will make up the difference through their Medicaid savings (Secs. 10.36 (a); 31.16). When fully implemented in 2010-11, counties will be relieved of $671 million in Medicaid costs by foregoing $410 million in revenues. Any county in which the sales tax revenue stream exceeds its Medicaid expense would be held harmless in perpetuity based on actual Medicaid expenses and actual foregone revenues, with a guaranteed benefit of at least $500,000, providing an additional $42 million in state funding to counties. Counties would hold cities harmless - $153 million in 2010-11, with growth included in their hold harmless payments mirroring that of the remaining local sales taxes. The General Assembly and the Governor's Office also recognized the need for additional revenue authority for counties to meet their growing infrastructure demands for schools, courthouses, jails and other critical capital investments. To manage the expected influx of newcomers and to renovate and restore existing infrastructure, the budget includes authority for counties to levy either a 0.4 percent land transfer tax, estimated to generate $310 million annually, or a quarter-cent sales tax, estimated to generate $250 million annually, subject to voter referendum (Sec. 31.17). The 2007 legislative session is truly a banner year for counties! In one fell swoop, the three priority goals adopted by our membership in January -permanent Medicaid relief, additional infrastructure funding, and additional revenue authority -were made available to all 100 counties. Now onto other budget news. 8/28/2007 County Medicaid Relief, Additional Revenue Authority Drive Budget Discussion, Adoption