(The Center Square) – North Carolina legislators who met Wednesday to discuss cutting property taxes were hit with a grim report on the future of federal funding for states and local governments that could actually drive up costs for many programs, making tax cuts more difficult.
Dr. Whitney Afonzo, a professor in the University of North Carolina’s School of Government, provided an update on the changing funding landscape between state and local governments and Washington. She called the changes “cost shifting.”
One is the Supplemental Nutrition Assistance Program, commonly called SNAP or food stamps. Another is Medicaid, the state-federal health insurance program for low-income residents. Even the Federal Emergency Management Agency, which oversees disaster recovery, may be included.
Another cost shift is in the area of “digital accessibility” – a federal requirement making documents available online.
“It sounds great,” Afonzo said. “We are not grandfathering it in, though. We are seeing a period when we are having to go back and make a lot of our documents accessible.”
Across the country, the cost for more than 3,000 counties and parishes could eclipse $1 billion. For cities collectively, it could reach $2 billion.
Recurring costs each year for counties could be $80 million and $250 million for cities, Afonzo told members of the North Carolina House Select Committee on Property Tax Reduction and Reform.
“Budget documents at the local level are often 100 pages long,” she said. “They are estimating about $7 per page for a portable document format to make it digitally accessible..”
The costs will add up quickly and the penalties for not complying are also steep, said Afonzo.
There are also new federal agency requirements such as lead-pipe replacement which could cost $90 billion nationally, the professor said. Clearing up so-called “forever chemicals” could also cost billions, she added.
The federal government has reduced the money it give states for educational programs.
“For example about $325 million was either cancelled or withheld from North Carolina school systems last year alone, including $90 million in teacher training grants, and mental health grants, $25 million were cancelled last year as well,” Afonzo said.
Much of the federal funding for cybersecurity grants for local governments has also been pulled, she added.
The federal government had been paying half the cost of administering the SNAP program, with the remainder paid by state and local governments. Now, the state and local government share has increased to 75%. In North Carolina, that change could cost counties as much as $70 million annually.
The ever increasing cost of government, including property taxes, is starting to pressure young families, said State Rep. Jeff Zenger, a Republican from Forsyth County .
“Things have gotten so costly that most families are two income families,” the legislator said. “They are taking care of their kids, putting them through school, coaching soccer and basketball. Every regulation, every little tax, every little thing keeps adding up and adding up. They are getting squeezed. ”
Not all of those regulations and fees are necessary, he said.
“Maybe I’m just a little quirky, but when I think about efficiently operated entities, government doesn’t come to mind.”
