2011 Legislature: Hurdles remain before counties take on state programs

Effective July 1, Nevada counties will be responsible for a dozen programs currently operated by the state - either by taking them over or paying the state to continue running them.

But with little less than a week to go, the mechanics of how all that will happen is largely up in the air.

According to Mike Willden, Health and Human Services director, there are contracts to negotiate and decisions to be made at the state and the county levels, a process that will likely take six months.

Willden's problem is that, until much of that is done, county money may not be coming in to support those programs.

"Counties will more than likely simply have to pay the assessments for the next several months," he said.

If they don't, Willden said he'll have to borrow from the General Fund or program budget reserves to keep the services coming. Not providing programs such developmental services for children, youth parole, rural child protective services and welfare emergency assistance isn't an option.

"It's going to be a summer's worth of work," said Willden. "I think we probably have 45 to 60 days of discussions. Some of the contracts are not even in signable form yet."

Both Willden and Nevada Association of Counties Director Jeff Fontaine said how this all plays out is very much a moving target. Counties including Carson City are looking at a variety of different approaches including regionalizing some services - creating one program to handle specific functions for several counties.

Carson City Manager Larry Werner said the capital may ask if it can piggyback on some existing Washoe County programs. Carson lobbyist Mary Walker is working to combine Carson, Douglas, Lyon and Storey counties for some programs, according to Fontaine.

He said the program shifts will undeniably result in further cuts at the county level.

"It's pretty darn ugly out there," Fontaine said. "Counties can't absorb these kinds of cost increases. It's going to result in more layoffs and reductions in services."

Altogether, the shifts, cuts and transfers in documents provided by Willden come to just less than $100 million during the biennium.

The largest single piece is sweeping the Indigent Accident Fund - a $39.4 million hit over the biennium. That money is used by counties to pay major medical bills run up by indigents involved in car wrecks. County officials have said some small jurisdictions could be bankrupted by multiple major injuries in an accident without that money.

Fontaine said the Medicaid Match program is a costly change for counties - an estimated $14.5 million over the biennium. The new law changed the rules to force counties to begin picking up more of the costs of recipients in institutional care.

But Fontaine said the most worrisome change is eliminating the law capping county liability at 8 cents of their property tax revenue. He said some counties like Mineral are at the statutory property tax cap of $3.64 and, if their Medicaid Match costs go above what the 8-cents generates, they won't have the ability to pay the difference without cutting other county services.

Willden said his staff will consider a hardship exemption but that in Mineral's case, the impact is only about $82,000 a year. He agreed with Fontaine that the big sticking points for county officials are the county match and the Mental Health Developmental Services for children.

Werner said Carson City got a quarter million dollar break on the developmental services piece when Willden's office decided the cost should be billed to the county where the parent or guardian lives instead of the county where the service is provided. Basically, the only counties where those services are available are Clark, Washoe and Carson City so those counties ended up with all the costs. The change dropped Carson City's tab for those services from more than a half-million a year to a little more than $250,000.

Werner said altogether, Carson City will have to find about $1.1 million a year to pay for the shifted services and programs.

Like other county officials, Werner said his staff and the Board of Supervisors have a number of decisions to make in coming months.