Medicaid, the latest Senate plan
The Senate Finance Committee has passed the latest version of a Medicaid swap bill. They're rewriting an old House bill that had to do with 529 plans.
The reason bills get filed in this way are to send them straight to a concurrence vote in the other chamber, rather than shunting it into the full committee process.
You can click here to listen to Sen. Rand 'splain it, but the broad outlines are these:
- The state would take over Medicaid in a three-year phase in.
- The state takes back a half cent of the sales taxing authority from the counties in two quarter-cent chunks.
- The deal creates a 12 percent Earned Income Tax Credit that is nonrefundable.
- There is no transfer tax involved or local option sales tax involved.
You'll remember that the transfer tax has been the subject of some vigorous lobbying. The idea behind giving counties the ability to that or a local sales tax was that some counties (mainly big, urban ones) would lose out on the swap - they would lose more in taxing powers than they would gain in Medicaid relief. The local options were meant to give counties a way to make up their losses.
Under this plan, the state would reset how sales tax is distributed to counties in an effort to get rid of that winners-and-losers situation. Instead of getting sales tax based equally on the point of a purchase and how many people live in a county, the proposed formula would weight things more toward the point of the purchase. That favors large urban counties - who might otherwise lose on the Medicaid swap - because they have more points to purchase from.
Click here to listen to the two comments from the "public." Essentially, the County Commissioners Association likes the switch but the N.C. Justice Center doesn't like how the EITC was done.
Granted this proposal works around some issues the Senate had with all this, but there's no word on whether the House will consider it an acceptable alternative.