From the Executive Director: Week of February 22

22 Feb 2021, by Seth Grigg Share :

This past week was a busy one at the Capitol, especially for counties. In addition to Senate Bill 1108 clearing the Senate State Affairs Committee on a 6-3 vote (with Senators Lakey, Nye, and Rabe voting no), two other bills were introduced which would impact county budgets. The House Revenue and Taxation Committee introduced House Bill 199 and House Bill 218. House Bill 199 reduces income tax rates, drops the sales tax from 6% to 5.3%, eliminates the grocery tax credit, and directs online sales tax collections to the general fund, bypassing the sales tax distribution formula and county revenue sharing. House Bill 218 exempts business personal property from taxation, phasing out the tax 1/10th a year for ten years. The amount of property tax replacement provided to counties and other taxing districts would be capped at current levels. The prospect of either bill advancing is unclear at the moment. House Bill 199 would actually raise taxes on individuals making less than $50,000 a year and the cost to the state general fund of replacing exempted personal property taxes is estimated to be $135 million.

In addition to these bills, other bills have been introduced or will be introduced having a fiscal impact on counties. The two that IAC is monitoring most closely are House Bill 192 and a yet to be introduced bill to fund Medicaid expansion. House Bill 192 proposes the creation of a statewide public defense system operated by the state. While counties would no longer be required to oversee trial-level public defense, they would be expected to pay for public defense through a loss of revenue sharing. The yet to be introduced Medicaid expansion funding proposal would restrict eligibility for the county indigent and CAT programs and require counties to use associated savings to fund the state share of annual public health district assessments. This would save the state $10 million, the savings of which would help fund increased Medicaid expansion costs.

Because there are so many bills impacting county budgets, it is critical that each of you take the time to reach out to your legislators and talk with them about your county budget and the impact proposed legislation would have on your county and its taxpayers. We anticipate other local government budget related proposals are in the works and will be introduced in the coming weeks. We are also monitoring to see how the legislature will react to the prospect of more federal funding for state and local governments from the next round of CARES Act related funding.

You all have relationships with your legislators. Please continue to work with your legislators on solutions that provide your county with the resources it needs to provide mandated services and provide relief to your local taxpayers. Many of you are opinion leaders in your communities. Please don’t forget that. On matters that are important, your legislators will listen. Keep up the good work. 

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