Friday, April 29, 2016

NDACo President Testifies on Social Service Funding

As the interim Political Subdivision Taxation Committee furthers it's discussion on transferring the cost of social services from the counties to the state, legislators look for greater information from the counties. Committee members, who are a combination of lawmakers who sit on the tax and finance and human service committees have a desire to really understand the long-term commitment in assuming these costs. Transferring the cost of county social services to the state is estimated at $100 million a biennium. This in turn, will result in a decrease in local property taxes, which is currently how social service programs are largely funded in North Dakota counties.
NDACo President Steve Reiser appears before Political Subdivision Taxation committee

NDACo was asked to respond to several committee member's questions and concerns during a hearing this week. Legislators wanted a look at the social service budgets for 2015 county by county. What NDACo President Steve Reiser provided legislators was a thorough look at the expenses associated with a county social service department. In which a majority, 87 percent, of county social service budgets are direct personnel costs including salary, payroll taxes and benefits.

The committee also requested that NDACo provide input into the appropriate growth, or inflation factor to use in calculating future reimbursements. Personnel costs are almost exclusively driven by state salary adjustments and health insurance premium changes. NDACo proposes using a blended factor to reflect growth of both salaries and insurance rather than an inflationary rate that has no direct relation to those two adjustments.

Lawmakers also wanted to explore what is the appropriate ending fund balances or reserves to be maintained by a social service unit. NDACo maintains that a certain level of reserves is critical for social service programs. A formula should be developed that also addresses ending fund balances. Legislators suggest the balances above that threshold could be deposited in the county general fund to reduce taxes.

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