Senate committee approves bill on Medicaid costs that avoids transfer tax
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Senate committee approves bill on Medicaid costs that avoids transfer tax

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The state Senate finance committee has unanimously approved a bill that would have the state gradually take over Medicaid costs from North Carolina counties.

Counties would not, however, get the ability to levy a land-transfer tax – a move many local officials have supported but one that has been opposed loudly by real estate agents and others in the real-estate industry.

Instead, the state will receive money from a half-cent of the state sales tax that now goes to counties – taking over funds from a quarter-cent of the tax in July 2008 and the other quarter-cent in July 2009. The state will also take $45 million of the county share of the corporate income tax in fiscal 2008 to cover its coffers during the transition.

Counties now pay 15 percent of the state costs for Medicaid – an amount that the North Carolina Association of County Commissioners estimates will be $517 million in fiscal 2008. Counties will be asked to foot 12.25 percent of the state Medicaid bill next fiscal year and 7.5 percent in fiscal 2008.

The proposal approved Tuesday now goes to the entire state Senate for approval.

Triangle Business Journal 

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