Don’t look now, but a billion dollar state-wide tax hike may be headed our way. Mecklenburg County may be forced to trade state takeover of Medicaid spending for a one-cent increase in the county sales tax, to 8.5 percent. Center for Local Innovation chief Chad Adams has the details:
The NC Association of Commissioners is floating a new idea to deal with the escalating cost of Medicaid and the fact that it is partially funded by counties in NC (the last state to look at this ludicrous way to fund it).
In this scenario, please pay close attention, the state will take Title-39 money (a 1-cent sales tax) that counties receive. In turn the state will take over all of the county portion of Medicaid.
To replace the money, the state will ALLOW the counties to enact a new 1-cent sales tax on themselves. And through this counties will have to hold cities harmless as well.
If done, the 1-cent that the state will take over gives them roughly $1 billion. The cost for taking over Medicaid is roughly $450 million which means the state would receive a $550 million windfall.
Counties would be wise to reject this absurd idea that will ultimiately result in them passing a $1 billion tax increase because of a lack of leadership in Raleigh. One would hope that the Association would have rejected this out of hand rather than pass it along as remotely serious.
Oh, I’ve been told that Sen. Tony Rand’s (D-Cumberland) proposed this absurd idea. The counties already took a hit on the new voting machine law and Mental Health reform, at some point in time you’d think they would stand for something!
Wake County has already voted against the deal, but that is not enough to stop it from getting passed by the General Assembly, where rural interests usually prevail. Meck’s own Rep. Beverly Earle (D) co-chairs the relevant legislative committee. Mecklenburg is spending about $30 million a year on Medicaid payments.
This map shows which counties would benefit the most from the swap. Hint: It ain’t Mecklenburg.
Update: Forsyth County is also opposed to the idea, as are many other counties. This leads some to believe the idea of the swap is dead. Do not believe that for a second. Remember how many times the lotto was dead and gone?
