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Dalrymple proposes big shift with plan to fund county social services

BISMARCK - At Lakes Social Service District in Devils Lake, Rhonda Allery and her staff have seen reports of child abuse or neglect jump from 25 to 40 per month and the average number of foster cases rise from about 40 to 55 in recent years.

BISMARCK – At Lakes Social Service District in Devils Lake, Rhonda Allery and her staff have seen reports of child abuse or neglect jump from 25 to 40 per month and the average number of foster cases rise from about 40 to 55 in recent years.
But when budget time rolls around and county leaders are looking for places to ease the tax burden on local property owners, “social services tends to be looked at hard,” said Allery, director of the agency, which serves both Ramsey and Towner counties.
Allery hopes a proposal unveiled by Gov. Jack Dalrymple to have the state assume some – and eventually most, if not all – of the costs of county-based social services will help.
“We’re cautiously optimistic that it will mean funding us and not absorbing us into a statewide system,” she said.
As a first step, Dalrymple recommended in his budget address Wednesday that lawmakers spend $23 million from the state’s general fund to provide property tax relief by picking up counties’ share of the tab for certain social services programs.
“The end result will be more equitable, more efficient and more accountable funding of social services throughout the state,” he said, adding county employees would continue to deliver the services.
A similar proposal was defeated in a 41-49 vote during the 2013 legislative session, with House Majority Leader Al Carlson of Fargo leading the charge against it.
“There were just too many unanswered questions last time, and there was no guarantee that the state taking it over was actually going to be a reduction in the property taxes paid at home,” Carlson said.
Lawmakers head back into their once-every-two-years regular session on Jan. 6 and will scrutinize the new proposal for its reimbursement plan, employee oversight and other factors, Carlson said.
Unless it results in an equivalent cut in property taxes, “it makes no sense for the state to add on another level of services there,” he said.
“But if it’s a dollar-for-dollar reduction at home and the state can afford to do it, then I think we should take a serious look at it,” he said.
‘Seems logical’
Dalrymple likes to remind people that the concept of the state paying for social services isn’t new.
That was the norm until the late 1980s, when counties facing mounting demand for expanded social services approached the Legislature about providing more state funding.
Dalrymple, who at the time was a state representative serving a rural Cass County district, recalled that state coffers were low and the Legislature wasn’t raising taxes.
In April 1989, lawmakers gave counties the power to levy 20 mills for social services and, if that wasn’t enough, to impose an unlimited number of mills through an emergency human services levy.
“It was really borne out of the fact that the state didn’t have any money,” Dalrymple said.
Forty-seven of North Dakota’s 53 counties used the main social services levy at an average of 14.5 mills in tax year 2013, and nine counties used the emergency levy at an average of 5.9 mills, according to the state tax commissioner’s office. One mill is $4.50 in property tax on a $100,000 home.
“Now, of course, the state does have good resources,” Dalrymple said. “The state’s interested in seeing property taxes go down. And so it seems logical to me that we should be going back and reassuming those expenses.”
While the concept isn’t new, Dalrymple said social services have expanded so much, it’s not fair to compare them with what was in place in 1989.
“It’s almost like a world unto itself now,” he said.
‘Costs don’t relate’
In the last decade, the total taxes levied by counties for social services in North Dakota has increased by 63 percent, from $32.2 million in tax year 2004 to $52.4 million in tax year 2013. The amounts vary widely by county, from $10.7 million in Cass County to $93,400 in Sioux County last year.
Cass County Auditor Mike Montplaisir said the governor’s proposal for 2015-17 would cut about 4 mills from the county’s 60-mill levy, which would save the owner of a $100,000 home $18 annually.
The savings would increase to $90 annually if the governor’s plan for the state to start reimbursing counties for the entire 20-mill social services levy in 2017-19 materializes.
“So it’s not a huge savings, but we’ve always felt those costs don’t relate well to property, so why should property tax payers pay them,” Montplaisir said.
North Dakota Association of Counties Executive Director Mark Johnson echoed that sentiment, saying the aim is to relieve property owners from paying “for something that typically is not necessarily a local problem.
“Because we do have a lot of immigration going on in North Dakota, and people coming from all over, and the local property tax payers are picking up the bill,” he said. “And the governor, I think, feels strongly that … in the future, that shouldn’t be the case. Fifty years ago, each county took care of their own, but that’s not the case anymore.”
System needs ‘careful study’
The $23.2 million in tax relief proposed in the governor’s budget breaks down into two areas of spending from the state’s general fund.
About $19.3 million would be used to bear the counties’ share of costs related to assistance payments to the elderly and disabled, child welfare services and technology.
The other $3.9 million would come in the form of state grants to counties that have historically used their emergency levy authority, which would be repealed as recommended by the governor’s Task Force on Property Tax Reform.
Dalrymple’s broader plan for the state to assume most, if not all, county social services costs in the 2017-19 biennium. That can’t happen until the Department of Human Services completes a software package to gather better information on caseloads for a reimbursement system, DHS Executive Director Maggie Anderson said.
Dalrymple said that system will require “careful study,” and a task force would be created to work out the details.
The plan would boost accountability because the state would verify eligibility for benefits and make that process more consistent from county to county, he said.
Johnson agreed with Dalrymple that finding efficiencies is “an essential piece” of the plan, noting some counties already share a social services director. He said the counties’ biggest concern is that their staff remain county employees and be allowed to serve those in need.
“We feel as if the local people know the local people and can provide the most responsive delivery of services and also weed out those that might be using the system more than they should,” he said.

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