Legislative Update – January 23, 2019

This week marks the third week of the 2019 Legislative Session. While bill introductions have been slower than usual, much is happening behind the scenes. For counties, three key issues will likely intersect:

• Medicaid Expansion
• Public Defense
• Raising the Justice Levy

I recommend keeping a close eye on these important issues throughout the session in have regular conversations with your legislators about how these and other policies will impact your county.

Medicaid Expansion

Discussions are underway to implement voter-approved Proposition 2 expanding Medicaid eligibility in Idaho. Many ideas are being discussed and will continue to be discussed until there is consensus on how to move forward. Two ideas in particular are taking shape in the House to fund Medicaid expansion. One idea proposes suspending the state CAT fund and the county indigent program. Under this proposal, counties and the state would split the cost of Medicaid expansion. Counties would be required to forego 33% of state sales tax revenue sharing in exchange for no longer having to cover indigent medical expenses at the local levy. Counties would be allowed to redeploy tax dollars currently going to indigent medical services to other county services. While this proposal would be easy on the state to implement, it would be inequitable to counties. Diverting a set percentage of general fund revenue sharing dollars has no correlation to individual county indigent expenses. Furthermore, it exchanges general fund revenues for a dedicated property tax revenue (indigent levy). Counties would be free to shift indigent levy dollars to other funds; however, due to statutory levy caps, this would not be an option for many counties.

An alternative proposal endorsed several years ago by IAC proposes repealing the CAT and county indigent programs and using indigent levy savings to provide local property tax relief. This scenario would reduce the overall levy cap on the indigent levy, providing enough levy authority to cover nonmedical indigency expenses as well as involuntary mental health commitments. It would also increase the levy cap on the justice levy to meet growing county criminal justice needs. This proposal would leverage state savings to fund Medicaid expansion. Other ideas are likely to materialize in the coming weeks and will be ready for discussion at our upcoming IAC Midwinter Conference.

Public Defense

Public Defense Commission rules were adopted by the legislature last week. The rules include amendments requested by IAC to exempt counties from complying with proposed caseload standards if the state fails to appropriate funding to assist counties in meeting the standards. The amendment is a real win for counties and marks a turning point in the improving relationship between county officials and the Public Defense Commission. Now that the rules are in place, the state turns its attention to providing a new funding framework for counties. Under Governor Little’s proposed budget, counties would receive nearly $11 million in state public defense assistance, a significant increase from the $4 million granted in 2018. Legislators are beginning to see the challenges counties face in managing and funding public defense and are open to discussing public defense delivery alternatives. While a state takeover of public defense is unlikely this year, the groundwork is being laid for 2020 and beyond.

Justice Levy

As the legislature discusses options to expand and fund Medicaid, counties will likely see an unexpected development: an openness to increasing the statutory levy cap on the justice levy. While legislators in 2018 resisted a justice levy cap increase, the new legislature has been receptive to finding ways to address counties’ criminal justice funding shortfalls. There is a growing possibility that legislation to raise the justice levy may be tied to potential Medicaid expansion proposals. We hope to have a clearer idea of options to increase the justice levy cap to discuss with the membership at Midwinter Conference.

Midwinter Conference

The IAC Midwinter Legislative Conference is fast approaching. The meeting will feature remarks from Governor Brad Little, results from the Office of Performance Evaluation’s study on state mandates and county budgets, and presentations by legislative leadership. In addition, IAC committees will discuss pending legislation and the full membership will have an opportunity to weigh in on important legislative topics like public defense, the justice levy, Medicaid expansion, and sales tax revenue sharing. I encourage county officials to attend and participate in the debate. It’s not too late to register. Registrations can be made on the IAC website by clicking here. I hope to see everyone in Boise!

Seth Grigg

Executive Director