Monday, April 10, 2017

Social Service Funding Bill Returned to Committee

Representatives sent SB 2206 back to the House Finance and Tax committee Monday morning after recognizing the amendment to simply study the social service funding concept for two years was facing strong opposition in that chamber.

House Majority Leader Al Carlson offered a new amendment to the committee which was adopted after good committee discussion.

NDACo believes this is a reasonable compromise. There is a lot of merit to the new amendment and we are appreciative of the time key legislators have put into this amendment to move this bill in the right direction. 

The new proposal calls for the state to fund county social services statewide for a two year pilot program in calendar years 2018 and 2019. The payment rates to counties would be based on individual counties' CY2015 cases and costs. Weighting factors and inflators that were in the original bill were removed. The amendment keeps the original intent of SB 2206 with funding county social services and by eliminating a counties levy authority of 20 mills to provide the social services.

Under this plan, the level of property tax relief to citizens will decrease from its current level. The 12% property tax buy-down will be repealed. Legislators have commented the current level of property tax relief can not be sustained this session. The option to fund county social services alone is  expected to cost $161 million. It will reduce oversll property taxes roughly 6% a year with the elimination of the county social service levy.  

Since this is a two year pilot program, the Department of Human Services is tasked with submitting a plan to the 2019 Legislative Assembly for the permanent implementation of state funding of county social services. The plan is to include any recommendations regarding efficiencies in the delivery of social services.

 "Counties believe there could be a few minor improvements to this bill. Essentially linking future  funding of county social services to 2015 expenditures is problematic for our counties," said NDACo's Terry Traynor. "For example, in 2015 the legislature raised state employee salaries, triggering increases to social service salaries in 2016 and 2017 that would  not be recognized. Ignoring this inflation is problematic and could result in impacting services and/or some counties using property taxes to some degree."

The amendment will now go before the House for it's approval. Since the House and Senate versions vary significantly, SB 2206 is expected to head into a conference committee where three members of each chamber will work out their differences in the bill. 

The assumption of county social service costs is one of a number of efforts by the state to provide state-paid property tax relief to the citizens of North Dakota. In the 2017-2019 biennium it is estimated the state will be delivering $1.1 billion in property tax relief as shown here.

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