Friday, February 17, 2017

NDACo Legislative Report #8

Crossover should easily arrive on time, or very likely a bit early this year.  It has to do with leadership seeing its shadow or something.  Rumors suggest a short morning of floor sessions next Thursday and out the door they will go.

As scheduled, there will be no legislative activity on Monday and Tuesday, February 27 & 28, so we expect a light week for hearings then, and as you can see below, and extremely light week for hearings coming up, since much of the time (particularly in the House) will be spend on the floor.  So rather than talking about hearings, let’s look at some of the major county issues and discuss their status.

SB2206, social service funding, was amended slightly by the Senate Appropriations Committee to allow for spreading federal penalties and charges among the counties as is currently done, and to correct a technical issue in language.  The bill was then given a strong Do Pass recommendation, and will likely be voted on by the full Senate next Monday.  Senate Leadership and the body itself continue to appear very supportive of this concept.  When it gets to the House side, we will have a bit of a different reception.  While many, many of the House members see great value in this proposal, Leadership has not yet embraced the concept.  We expect this to be a major discussion item at our County Officials Academy next month, and we are hopeful that we will have a lot of county folks available to communicate this to their legislators face-to-face.

SIRN (Interoperable Radio) Funding is addressed by two bills. HB1178 provides an additional 50-cent fee on phone service to be dedicated to the LOCAL costs of a statewide system – our estimates are that this generates about $9.5 million per biennium.  SB2204 would add an administrative fee on criminal ($100) and non-criminal ($40) traffic violations, dedicating the funds to the STATE share of the system.  This one is tougher to project, but possibly $6 million would be generated.  Senate passage of an increase cost for speeding (over a 5/1 Do Not Pass recommendation) was surprising to many, and this may see stronger opposition in the House.  While the two together produce insufficient funds to totally implement the system immediately, there is enough over the long-term to phase in the entire system over time.

The removal of the “sunset” on the ability for counties to retain the civil penalties on overweight (fat) trucks on county roads (SB2045) has been very well received.  This bill received unanimous support in the Senate, already crossed over, and has already received a unanimous Do Pass recommendation from the House Transportation Committee. 

Most major budgets, and particularly HB1012 addressing the Dept. of Human Services, have seen some very significant cuts in both dollars and authorized FTE’s.  Although not addressed on the House floor as yet, the appropriations work indicates impacts to most programs, with the largest hitting the nursing homes – as that is the largest single piece of the overall budget.  It does appear that the House will continue to keep the concept of Medicaid expansion alive, moving it from a stand-alone bill to this budget as well. 

As with all budgets, the comments have been that nothing can be final until the March budget projection is approved and released.  This data will drive all final budget decisions.  Although income tax collections remain strong, the three months of sales tax collections since the last revenue projections have been disappointing at best. 

Another big budget generating considerable concern for counties is SB2015 – Department of Corrections and Rehabilitation.  While the don’t have funding that flows down to counties, there have been repeated attempts to shift incarceration costs to the counties in a manner similar to last session.  Several amendments for this budget have included the “quota” concept proposed last session.  Counties have resisted these attempts and the final version does not include that language, however it does include the “right to refuse” language put in the bill last session. 

The NDDOT Budget, SB2012, did not have much debate on funding levels, as they are only slated to get the federal dollars and whatever the highway distribution fund generates.  However, that does not mean that budget was without controversy.  With the restriction in funds, the DOT looked for cost cutting measures and has proposed to reduce the number of section shops by 8 and reduce the number of satellite driver’s license sites they service by 9.  The driver’s license site reduction caused nary a ripple, but the “optimization” of the 8 section shops created a firestorm.  Although some of the staff and equipment from them would be consolidated into other sections, there would be a net reduction in five staff and four trucks suggesting a $4.4 million savings.  Sections proposed for closure are in Starkweather, Finley, Mayville, Courtenay, Fessenden, Litchville, Gackle, and New England.   Understandably, legislators from those areas fought hard in the Appropriations Committee and on the floor of the Senate to restore those sites, but ultimately were not successful.   The DOT budget will therefore go to the House without those sections funded, but the issue will undoubtedly be debated on that side as well. 

In the state employee compensation area, the legislature appears to be moving in a slightly different direction than originally proposed by the Governor.  Although this doesn’t directly affect counties, we realize it does have an indirect effect on local decision-making.  The executive proposal to require state employees to pay 5% of their health insurance was reversed (so far) but the 1% salary increase proposed for the second year of the biennium has been eliminated (so far).  Again, these decisions will be revisited after the new budget projection is final.  Not likely to get revisited was the decision to kill the proposed increase in NDPERS retirement contributions.  This “final step” in the NDPERS board’s effort to stabilize the fund for the long term (30+ years) will be moved down the road some more.

A number of poor property tax proposals (PPTPs) were defeated in the “first half”, but unfortunately not all of them.  A broad rewrite of the property tax exemption for churches (HB1424) was passed (56/34) in the House and if made into law could turn this exemption upside-down.  It would allow churches to maintain income-producing property as long as the income was used for “religious purposes”, and it would require the tax assessor to proof they were not using it in this manner, rather than the other way around.  This would be a huge shift in policy for the state.

And, of course, we have to address “caps” in the second half of the session.  While one cap bill was defeated, HB1361 was passed by the House (56/34).  This bill, sponsored by the Majority Leader and the Chair of the Finance & Tax Committee, would limit all local governments (except schools) to 3% increase in taxes, unless a citizen vote was held to increase that limit.  It was identified that if schools were held to the 3%, it would cost the state $34 million more in school aid, so they delayed their involvement for two years.  For all the reasons we have discussed in the past, this is very bad public policy, and the research would suggest it is largely ineffective if not counter-productive.  For those interested, some of this research is posted on the “testimony page” of our legislative blog.  We will be looking for a good turnout when this bill is heard in the Senate. 

The concept of repealing the confusing “Truth in Taxation” notices and implementing a single unified notice prepared by the county has some traction, passing the Senate unanimously.  This bill (SB2288) was extensively amended at the request of County Auditors, and it will force the completion of centrally assessed property about a month earlier to facilitate greater accuracy in budget estimates.  Recognizing there are still concerns about the bill, this will be one that needs thorough review and more discussion as it moves to the House.

This report is getting awfully long for a blog post, and we still haven’t talked about county health funding, drug testing for TANF clients, indigent burials, wind generation taxation, GPT funding, recorder’s fees, infrastructure financing, large trucks, ag trucks, tarps & mud flaps, tiling, guns, drugs, protestors or marijuana.  All these and more will be addressed at the County Officials Academy March 6-7 in Bismarck.  Pre-registration is open until Feb. 24th (link below).   SEE YOU ALL THERE!

Hearings for Next Week


Top of Form
Monday 2/20

DHS bill to update language regarding develop. disabilities  
Senate Human Services 
Red River 
S *  
DHS to recover SPED overpayment
Senate Human Services 
Red River 
24/7 records to be given within 30 days 
House Judiciary 
Tuesday 2/21

J ***
Medical Marijuana implementation  
Senate Appropriations 
S * 
DHS bill updating language and creating a voucher program for substance abuse 
Bottom of Form
Senate Human Services 
Red River 

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