Legislative Committees Working Wrap Up Interim Studies

The North Dakota Interim Legislative Committees have a busy schedule in September. These committees are looking to wrap up the studies they have been assigned. Follow up from the studies typically includes drafting of bills and approval of bills to submit for the 2021 Legislature's consideration. The COVID-19 pandemic has greatly impacted the interim process by delaying meetings. The biggest change for the interim has been the addition of video streaming. This allows lawmakers to attend online as well as the public to also view the meeting remotely.  

You can view the calendar of scheduled meetings for the month of September below. Visit https://www.legis.nd.gov/events to see each meeting, agenda along with information to allow you to view the live stream of the meeting. 

Counties to Receive $25 million in CARES Funding for COVID-19 Costs and Impacts

North Dakota lawmakers approved sending $25.4 million in COVID-19 relief funds to North Dakota counties. The North Dakota Legislative Budget Section made the final approval August 13th as part of a package that is the third tranche of federal funding to support the state’s COVID-19 response and recovery efforts. Cities and counties will receive $59 million, on top of the $20 million for public health units.

“This is very important for county government which has experienced the double impact of increased costs related to coronavirus response and decreasing revenues caused by the related economic downturn,” said North Dakota Association of Counties Executive Director Terry Traynor. 

Counties are on the front lines of the coronavirus pandemic response. During this unprecedented public health emergency, counties are committed to mitigate COVID-19 and its impacts on citizens. Public health employees have been directly involved in COVID-19 testing and contact tracing, but counties have also seen dramatic COVID-19 impacts affecting elections, jails and law enforcement along with the investments in making county facilities safe environments to work and do business. 

“As local governments experience declining revenues during the COVID-19 pandemic, this substantial support will help cities and counties limit property tax increases by delivering the relief to them before their 2021 budgets are finalized,” said Governor Doug Burgum. “We’re grateful for the partnership of our legislative leaders and local political subdivisions in developing this consistent approach.”

The $59 million will be paid out as a reimbursement for law enforcement payroll based on each jurisdiction’s number of law enforcement officers and actual payroll costs from March through September. Public safety payroll is considered an allowable expense to distribution of Coronavirus Relief Fund dollars.

NDACo, working with the ND League of Cities (NDLC) and state leaders, reached this agreement as the mechanism to get much-needed funds to local governments for COVID-19 impacts. These funds will be immediately available to the city and county general funds for calendar year 2020 costs, or to address calendar year 2021 budget issues.

Office of Management and Budget (OMB) Director Joe Morrissette explained to lawmakers how these funds will be a welcome form of tax relief to jurisdictions struggling with the loss of revenue.

“These funds will provide meaningful support for local government at a time when they are building their budgets around a declining revenue from the state through the state aid allocations and highway tax distribution fund allocations, as well as significant reductions in their local revenues in sales tax and hotel and lodging taxes,” explained Morrissette.

Traynor says it is clear there is an expectation these funds will be used in a way that will benefit property taxpayers and keep property tax mill rates as low as possible.

NDACo and NDLC have been working with OMB on the documentation needed from cities and counties to certify the expenditures to each city and county. Morrissette expects that the payments to cities and counties should be made in a matter of weeks.

“The simple, straightforward mechanism to deliver this fiscal relief to local taxpayers is the result of North Dakota’s exceptional state and local partnership. County officials thank Governor Burgum, his staff and our legislative leadership for making this possible,” said Traynor.

North Dakota received $1.25 billion from the Coronavirus Relief Fund as part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $319.7 million approved in August is what remained of the state’s Coronavirus Relief Fund dollars.

Governor Proposes Release of CARES Funds to Counties & Cities

Consistent with U.S. Treasury CARES Act guidance, the Governor is taking a proposal to the Emergency Commission this coming Monday to reimburse counties and cities for “law enforcement first responder payroll costs” for the first 7 months of the pandemic (March - Sept.).  If approved by the EC and the Budget Section, counties will simply submit their total payroll costs for sworn officers for March through July – for immediate reimbursement.  August and September payroll amounts will be submitted and reimbursed later, once they are incurred.

This concept will get much needed revenue (~$59 million) to counties and cities quickly and efficiently.  This will constitute the jurisdiction’s entire allocation, and any previously reimbursed amounts will be deducted from the total payroll costs.  County estimates based on averages are included in the attached presentation, however reimbursements will be based on actual payroll costs (salary and benefits) paid.   The proposal was announced today at the Auditor’s Conference. Your county auditor will be bringing more specific information back from that presentation.  We will also follow up with OMB instructions once formal approval is achieved. You can view the presentation with the proposal here: https://drive.google.com/file/d/1AdwaiyjeaQ5azJsI2ONgNVQlf7Z4-nw9/view?usp=sharing

"This is the result of a concerted effort by NDACo and the ND League of Cities, and tremendous support from OMB, the Governor’s Office and Legislative Leadership. We are extremely grateful to them for their understanding and dedicated effort on behalf of local government," said NDACo Executive Director Terry Traynor. "I personally would also like to thank all of our county auditors, their payroll and HR staff, and those law enforcement leaders that have helped provide the data necessary to make this case."

Counties Provide Frontline Services During Pandemic

Federal funding critical to assist counties in providing public health and emergency response during COVID-19 
North Dakota county employees are on the front lines of the response to the coronavirus pandemic. The services of county public health, corrections, human services, law enforcement, elections and general government have all been impacted and most of those impacts have a significant fiscal component.

CARES Act Reimbursement to Counties County officials are pleased that the Governor’s Office, through OMB and DES, is providing an avenue for these costs to be addressed by the Emergency Commission and Budget Section. County emergency managers and county auditors are working feverishly to get all costs incurred from March 1st through May 31st submitted into the FEMA grants system as well as the newly created OMB-Cares Act portal, in anticipation of the mid-June Emergency Commission meeting. County costs include staff overtime, PPE, sanitization of jails and other facilities, telework facilitation, secure ballot boxes and so much more.

Some costs associated with specific state agencies are being handled through state requests – notably public health support by Department of Health, human service overtime by Department of Human Services, and the holding of state prisoners in county jails by Department of Corrections and Rehabilitation. Reimbursing these unforeseen costs is so critical at a time when each county, like the state, is already experiencing revenue reductions due to the pandemic. Long-term, the reductions in State Aid Distribution, Highway Distribution, and Gross Production Tax (GPT) revenues will be devastating to the county services on which our citizens rely.

Below is an overview of some of the pressing county issues and activities related to COVID-19.
Local Public Health Staff Play Key Role in Community Testing and Contact Tracing During this unprecedented public health emergency, our local public health units have been working in cooperation with the state to mitigate COVID-19. Local public health staff play a vital role in contact tracing in the state as well as coordinate and assist with mass COVID-19 testing events. They are working with local leaders and businesses to meet the Governor’s Smart Restart guidelines by providing recommended guidance to those in their communities. Like many others, local health units have had to purchase additional equipment. Due to the concentration on conducting testing events and contact tracing, local public health is seeing additional costs for overtime, while foregoing much of their usual fee revenue from services they have been forced to suspend.

State Inmates Overcrowding County Jails

The North Dakota Department of Corrections and Rehabilitation suspended admissions of inmates on March 13th, which led to local facilities holding state-sentenced inmates who would normally be transferred to DOCR. Since this closure, local jail facilities have housed 134 state-sentenced inmates. The state has approved CARES funding for DOCR to reimburse counties for their cost to hold these inmates, which totals approximately $590,000. But the real issue is how the DOCR closure of admissions has put a strain on the operations of our local facilities and made it difficult for them to have the space necessary to segregate inmates. The COVID-19 threat is even greater for our jails as they continue to have new arrests brought into the facility. Counties have taken actions to reduce population to allow for isolation of new inmates and have changed their policies and procedures to ensure the safety of officers and inmates. NDACo has worked with jail administrators in holding meetings with DOCR on this issue to urge the reopening of admissions. DOCR has scheduled to transfer some of the inmates starting the first week in June. NDACo is currently working with jail administrators, local public health administrators and state partners in scheduling COVID testing at all local jail facilities.

Vote by Mail Only for June Election

To best protect voters and election workers, the June election will be Vote by Mail only. At the request of the North Dakota County Auditors Association, Governor Doug Burgum issued Executive Order 2020-13 on March 26th, which allows counties to authorize Vote by Mail only. This order suspended the requirement for counties to have at least one physical polling location. Counties in all 53 counties adopted Vote by Mail as the only method to conduct the June election. NDACo has worked closely with auditors on an outreach plan. We encourage you to check out NDACo’s Facebook page and share the election materials. The key message is to get voters to return their ballots. As of May 29th, only 40% of the 178,000 ballots sent to voters have been returned.

Courthouse Access The important work of our counties continued during the pandemic. However, every county restricted public access to the courthouse. Many implemented by-appointment-only entry, with individuals entering being screened. In response to CDC recommendations, counties also used alternative methods for their commission meetings, such as conference calls and/or web-based applications. Several counties have decided to continue with restricting access through the June 9th election to best protect county employees focused on the election work. We expect our counties to be reevaluating their access during their June meetings.

Budget Section Approves Additional CARES funds for ND and Provides General Fund Update

The North Dakota Legislature's Budget Section today approved sending out more than $500 million in federal funds to state agencies; which a portion of those funds will go to county government in a few specific areas.
"It should be noted that, although counties didn’t get our direct reimbursement request addressed, three very important county costs were approved, said NDACo Executive Director Terry Traynor. Those items are:

• DOH received $20 million for public health district estimated costs through December 30, 2020
• DOCR received $880,202 to reimburse county jails for expenses incurred housing DOCR sentenced inmates through July 2020
• DHS received $285,000 for human service zone direct expenses estimated through mid-September.

View the Budget Section agenda which includes a summary and links to the specific requests.

View the Legislative Council presentation on the Coronavirus Relief Fund - North Dakota State Plan

The Budget Section will meet again in June 25, to look at additional distributions of the federal funds. 

Joe Morrissette, Director of North Dakota Office of Management and Budget also provided an update on the status of the state budget. General Fund reviews for the month of April are $40 million short of the Legislative forecast. However, because revenues have tracked ahead of forecast prior to the COVID-19 pandemic, revenues overall are still ahead of forecast by $81 million. The ending fund balance of the state's general fund is expected to be $126 million June 2021. 

Budget Section Approves CARES Act Funding

It was an unusual sight in the Senate Chambers this week. The Budget Section met virtually with legislative members joining via phone and only a handful of state agency representatives physically being in the chamber. 

The meeting needed to be held to get the Legislature's approval for state agencies to accept federal funding. This is in response to the $2.2 trillion CARES Act federal economic rescue package, to respond to the coronavirus pandemic. North Dakota will be receiving $133.5 million to support rural transportation, K-12 education, child care, Medicaid and other assistance to provide services to North Dakota citizens. The Budget Section approved the following transactions: 

• Department of Transportation - $18 million
• Federal Transit Administration to support the Formula Grants for Rural Areas Program. 
• ND would receive a 280% increase in these funds through the CARES Act. 
• Program is one of the major funding sources that enable North Dakota rural communities to maintain a viable network of public transportation between those communities and larger communities which is essential for rural residents to get access to health services and shopping.  
• There is no state or local match required.
• Department of Public Instruction - $36.6 million
• Grants to assist school districts in providing services and continue educating students during the COVID-19 pandemic. 
• Funds will be distributed to school districts in proportion to what they receive in Title 1 funds.
• Department of Human Services - $42.7 million
• Grants to support increases to Medicaid FMAP, LIHEAP, Child Care Existing programs including grants for medical assistance including Medicaid and home and community based services. 
• DHS reports they are experiencing an increase in requests for Medicaid assistance with the COVID-19 pandemic.
• Nutritional services (Senior Centers & Meals on Wheels)
• Department of Human Services - $36 million
• Childcare Emergency Operation Grant to childcare providers as a result of the COVID-19 pandemic.  
• State Library - $200,000 

In addition, Office of Management and Budget Director Joe Morrissette, provided limited information related to revenues and the budget. "We are continually monitoring this fluid situation with the drop in oil prices and the evolving situation; that none of us have been through before with business closures," said Morrissette. He told lawmakers that it is difficult to summarize the impacts at this point as there is very little data collected and the duration of the pandemic is unknown. 

"We are working with Moody’s Analytics to use their best estimates and incorporate their estimates into models for North Dakota." Morrissette explained how the data from sales tax collections that will illustrate the impacts of business closures won't be collected until the end of April.  Morrissette also said the move to shift the income tax deadline to July 15th shouldn't have a negative impact on the state's budget. 

You can view the meeting video here: http://video.legis.nd.gov/en/PowerBrowser/PowerBrowserV2/20200409/-1/15203

March 2020 Interim Legislative Hearing Schedule

List of legislative interim hearings for March 2020

3/12  Human Services Committee
3/16  Information Technology Committee
3/18  Health Care Committee
3/18  Legislative Procedure and Arrangements Committee
3/19  Budget Section
3/24  Judiciary Committee
3/25  Water Topics Overview

Follow this link for the interactive legislative calendar where you can click on meetings to see individual agendas: https://www.legis.nd.gov/events/2020-03