The matter of the State of Iowa assuming payment of counties' Medicaid bills through retention of property tax relief dollars was a topic of discussion at the May 22 meeting of the Palo Alto County Board of Supervisors. Maureen Sandberg, Palo Alto County Mental Health Director, addressed the Board of Supervisors.
"I got a little bit of information from Emmet County the other day," said Sandberg. "Both Emmet County and Palo Alto County, in Fiscal Year 2014, will see a big drop in revenues because that state will start keeping our property tax relief money."
She shared that Emmet County was in "bad shape."
"They're going to be really tight for Fiscal Year 2013, tighter than we will. We will have a little bit of a cushion to go on for Fiscal Year 2013, but Emmet County won't have that," Sandberg said.
She explained that she would be attending a CPC/Northwest Regional meeting soon and that she intended on discussing the issue there. The current recommendation for Emmet County is to start trying to cut back in Fiscal Year 2013 to help with the shortfall of revenue in Fiscal Year 2014.
"I told you that all Medicaid would be paid for by the state starting in July, and that means we'll be paying around $60,000 less every month," said Sandberg. "This is because the state is going to keep our property tax relief money, which is $404,000 per year, and they're going to pay our Medicaid bills."
The current recommendation for Emmet County is to not pay any more Medicaid bills starting this month.
"I wondered if we can actually do that," said Sandberg. "If we don't pay those bills, we're still going to owe them. Are they going to come back to us and tell us we have to pay those? If Palo Alto County does that for May and June, prior to July, it would save us a little over $120,000 for those two months, which would be helpful to start saving money before Fiscal Year 2014."
She said that, technically, Palo Alto County receives property tax relief money in July in the amount of $200,000.
"That $200,000 is supposed to help pay for the Medicaid bills and the bills that we have through the summer," said Sandberg. "So, some counties are kind of counting on that first half of property tax relief money."
Sandberg also noted that the counties involved with the Seasons Center for Community Mental Health may be discussing elimination of the catchment fee.
"It's going to have to be a group effort, not just Emmet and Palo Alto Counties, because it's not fair to the other counties for Emmet and Palo Alto to just cut out that catchment fee," Sandberg shared. "Our catchment fee right now is about $65,000 a year."
Keith Wirtz, Chairman of the Board of Supervisors, wondered, "So, if you don't do the catchment fee, it's just fee for service?"
"We'll probably discuss that at our Northwest Region meeting," said Sandberg. "I'm just trying to give you some ideas. We're going to have a fund balance estimated at $350,000, which will carry us over to September. That's the only money we're getting. We won't get property tax relief money. We'll get through Fiscal Year 2013, but when 2014 comes we'll have to cut some where."
"You said you would be saving $60,000 a month on Medicaid starting in July. In 12 months that's over $700,000. What doesn't that make up for the $300,000?" asked Supervisor Ron Graettinger.
"It will to a certain extent," Sandberg answered. "If everything goes the way it's supposed to go, it will help us cut back. We'll save that money. In theory it would work, but the fear is that this may cost the state more than they thought and the state could shift funding."
Graettinger said, "But what you're telling us right now is that we should be in fine shape. We'd be getting back about what we were losing."
"On the other hand, legal settlement goes away," said Sandberg. "It's all up in the air. The state has been known to shift costs. I can see the state coming up with reasons to cut people off from the Medicaid program to cut their costs. That's going to cost the counties more because these people will still need the services and they'll come to the counties for help."
"That property tax relief money that we always got would show on every person's tax statement the amount of credit they were receiving. We're going to leave that on the statement and it will show zero, so the taxpayers know that it was taken away," noted Auditor Carmen Moser, bringing the discussion to a close.