BUDGET PROPOSAL SHIFTS COSTS TO AND TAKES FUNDS FROM COUNTIES (Association of County Commissioners)
The budget proposal unveiled by Governor Beverly Perdue on Thursday would cause a major shift in how the state’s public education system is funded and would force more responsibilities on county governments while reducing much-needed revenues to counties for school construction. The proposed budget shifts responsibility to counties to pay for replacement school buses ($56.9 million) and takes the unprecedented step of forcing counties to assume the workers’ compensation costs for state-paid public school employees ($34.6 million) and community college employees ($1.7 million). The proposal also reduces state-funded positions in the local public school systems for administration, academic support and other non-instructional support areas, which will put additional pressure on counties to fund these positions.
“Counties have been assured by lawmakers that the state will not attempt to balance its budget by pushing down unfunded mandates and additional responsibilities to counties or by taking county revenues,” said NCACC Executive Director David F. Thompson in a news release issued Thursday afternoon. “The current budget proposal does both, and we will be working with the House and Senate to address our concerns.”
Statutorily, counties are supposed to receive 40 percent of lottery proceeds for school capital needs. The proposed budget uses most of the county share of lottery proceeds for state education expenses and eliminates the county share of the corporate income tax dedicated to the Public School Building Capital Fund. These moves add up to a loss for counties of almost $200 million per year in much-needed school construction funds. The budget proposal also shifts more social services administrative costs to counties, resulting in $5.4 million of additional expenses for counties, and reduces state aid to public health departments by $6.8 million.
Counties have lost more than $260 million in school capital funds during the current biennium, and the budget proposal for the upcoming biennium would take away more than $375 million from counties. Here is a year-by-year look at the revenue losses to counties.
2009-10 – state took ADM funds from counties ($100 million loss to counties)
2010-11 – state took ADM funds from counties ($100 million loss to counties) and reduced lottery appropriation from $176 million to $113 million ($63 million loss to counties)
2011-12 – state ends ADM fund transfer from corporate income tax ($72 million loss to counties) and reduces lottery share to $45 million ($115 million loss to counties)
2012-13 – state ends ADM fund transfer from corporate income tax ($75 million loss to counties) and reduces lottery share to $45 million ($115 million loss to counties)
Total losses for counties: $640 million.
