Thursday, April 20, 2017

The Last? Weekly Report

As reported on the statewide news, the Legislature will not adjourn this week as hoped.  The target is now next Tuesday, or the 75th legislative day.  This would leave 5 days in the "bank" for the future.  Some however are less optimistic. Right now the most significant log jam is the Dept. of Human Services Budget.  The  House and Senate conferees are quite far apart on funding and on staffing.

Other budgets with disagreements include the Industrial Commission, NDPERS, and the Extension Service.  Working toward resolution is the Land Dept. Budget and some adjustments to the GPT formula for local distributions.  And the OMB Budget, which historically contains all last minute compromises and appropriations hasn't yet been addressed by the Senate for the first time - so all in all, there is plenty of work left.

Two policy bills of county interest also remain in conference. 

After numerous meetings with no headway, the Senate conferees agreed to take the House version of HB1361 - the Property Tax Cap bill - to the Senate floor for a vote.  This bill, if passed would automatically cap all property taxes on existing property at 3% growth permanently (except for schools) - unless the voters allowed a time-limited increase.  As we have argued before, this is unworkable.  We have also demonstrated that in most cases it is unnecessary.  While some years a county or city may need to increase taxes at a higher rate to recover from snow or flooding emergencies or specific needs, the average increase for most jurisdictions is less than 3%.  As this bill was passed overwhelmingly in the House, our best hope is for the Senate to kill this bill.  The Senate defeated a milder version of this (5-42) several weeks ago, so we are very hopeful they will do so again - but please urge your Senators to vote to kill HB1361.

The Social Service Funding bill - SB2206 has also had a difficult time making it out of conference committee.  It was voted out this morning (Thursday) but then was returned for some corrective action later in the day.  If you recall from last week we were looking for a number of specific improvements to the House version of the bill, and we were successful on some, but not all.

The House 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, now adjusted to CY2016 caseload. Weighting factors and inflators that were in the original bill were removed. The amendment keeps the original intent of SB2206 with state funding county social services and the elimination of the 20 mill levy for social services.

As 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.

Efforts were made to make improvements to the bill in three areas.  1) Inflate the cost figures to recognize salary, benefit, and caseload increases incurred since 2015; 2) Allow for enhanced funding if caseload increases in 2017 and 2018; and 3) make the interim study language more balanced and more focused on adequate service delivery.  Items #2, and #3 were addressed by the committee in today's action, but item 1 was only addressed to the extend that 2016 caseloads are now incorporated.  In addition the conference committee established thresholds for social service ending fund balances. $100,000 in counties with budgets less than $2 million and $500,000 in counties with budgets greater than $2 million.  Any funds in excess of those are to be transferred to the County General Fund on January 1, 2018 to lower county general fund levies. 

As the $160 million appropriated in this bill for payments to counties is the most the Legislature has determined can be spent for property tax relief, the "taxpayer hold harmless" provision of the original Senate bill has been left out.  This results in about a 6% property tax reduction on average, although the county level impacts vary with each county's social service costs.  

This bill will be addressed again in conference on Friday morning, with floor action sometime after that.

We will keep blogging to the end to keep you up to date on this developing issue, as well as everything else that happens. 


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