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EDITORIAL: Dumping On Counties: State -- Not Counties -- Should Pay N.C.'s Medicaid Costs

Posted on: Wednesday, 31 May 2006, 15:01 CDT

By The Charlotte Observer, N.C.

May 30--Here's what Chad Adams says about state-local government relations in North Carolina: "Officials in Raleigh have been willing to balance the state budget by putting new costs [on] or taking away traditional revenue streams from local communities. [For example,] no other state in the nation requires local governments to support Medicaid like North Carolina."

He's right, and it's outrageous. That's why it's good news that House leaders are calling for some relief for counties in this legislative session. Neither Gov. Mike Easley nor the Senate did so in their budget proposals.

Mr. Adams, director of the Raleigh-based nonprofit Center for Local Innovation, made his comment in explaining a report showing the cost of N.C. local government is steadily rising.

N.C. county governments may raise money only in a limited variety of ways approved by the state legislature. And the state can impose costs on counties that county commissioners can't control and, in some cases, are hard pressed to pay without neglecting other responsibilities.

Medicaid, the federal-state health care program for low-income people, is an eye-popping example. It's funded by a combination of federal and state money -- except in North Carolina, the only state that requires counties to pay a fixed percentage of the state's share. That cost is some $30 million to Mecklenburg, about 3.5 cents on the county tax rate.

Medicaid's cost to counties is soaring -- up 85 percent since 2000, according to the N.C. Association of County Commissioners. In a dozen counties, the cost more than doubled in that period. Counties can't control it. The state and federal governments make all decisions regarding eligibility, services and reimbursement rates. Yet in a year when legislators are dealing with a $2.4 billion budget surplus, neither Gov. Easley nor the state Senate has proposed anything to relieve the counties' Medicaid burden.

The burden is heavy. The N.C. Association of County Commissioners reports half the state's 100 counties spend more on Medicaid than on school facilities. Kitty Barnes, chair of Catawba's county commissioners and NCACC president, says soaring Medicaid costs force many counties to raise property taxes significantly or cut services to meet their mandate to provide schools. The NCACC says in 2005-06, 45 counties increased property taxes, 19 of them by at least 10 percent.

There's a simple solution: The state should relieve counties of the Medicaid burden. If legislators won't at least begin to shoulder that responsibility in a year when there's a $2.4 billion revenue surplus, when will they?

It's time to act.

Counties' Medicaid costs

Here's how Medicaid hits some counties:

Anson (Wadesboro): $2.5 million cost, 10.5 percent of the county budget.

Cleveland (Shelby): $7.4 million cost, 11 percent of budget

Gaston (Gastonia): $14.6 million cost, 12 percent of budget

Mecklenburg (Charlotte): $30 million cost, 2.7 percent of budget.

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Copyright (c) 2006, The Charlotte Observer, N.C.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Charlotte Observer (Charlotte, N.C.)

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