As we enter the home stretch of the 2020 Legislative Session, two issues remain unresolved for counties: how to fund Medicaid expansion and how to provide property tax relief. I’m personally meeting with members of the House and Senate on both issues as stakeholders strive to find a path forward that addresses legislative concerns while still providing counties with the budget flexibility needed to comply with the many state mandated service delivery requirements placed on counties.
On the Medicaid expansion front, House Bill 533 by Representative Britt Raybould (District 34, Bonneville and Madison Counties) was introduced last week. It is the first of several legislative proposals to fund Medicaid expansion. H0533 phases out the county indigent program within six months of passage and suspends the CAT program on July 1, 2021. It also directs a portion of county revenue sharing to a newly proposed Medicaid expansion stabilization account. The estimated impact to county revenue sharing is between $6.5 and $9.5 million depending on final enrollment numbers. If the amount was based calculated based on current Medicaid expansion enrollment, the fiscal impact to counties would be closer to $6.5 million. This is in line with annual growth in sales tax revenue sharing; thus, when coupled with county savings associated with Medicaid expansion, most counties will see a net savings and not a loss of total revenue. H0533 also includes language allowing funds from the charity levy to be used for any justice purpose, thereby allowing the charity levy to backfill any loss of revenue sharing otherwise used for justice fund purposes.
On the property tax front, the full House will likely vote this week on House Bill 409 to establish a one year freeze on local government property tax budget growth. IAC staff have been working with leadership from the House, Senate, and the Governor’s Office to find a potential alternative to a one year freeze. While a compromise is yet to be reached, there will be an interim committee to study property taxes over the interim. Alternatives being discussed range from a hard 3% cap to giving local taxing districts the option of raising their respective property tax budgets by up to 4% or new construction.
There will likely be a flurry of activity on both Medicaid expansion and property taxes over the next three weeks. Stay tuned to your emails for IAC legislative action alerts for more information. As always, please feel free to reach out to any member of the IAC policy team with any comments, concerns, or questions about legislation impacting counties.