State funding – local control focus of Social Services redesign

Gov. Doug Burgum has signed legislation to solve an issue that counties have had for years in funding social services. Senate bill 2124 redesigns county social services in North Dakota to improve the quality of services, increase the speed of delivery and reduce costs while continuing to provide property tax relief. The North Dakota Association of Counties (NDACo) celebrated the passing and signing of the legislation after so many years of trying to improve the social services system in North Dakota.

Ceremonial Bill Signing with Governor Doug Burgum

Posted 04/26/2019

By Melissa Anderson

NDACo Executive Director Terry Traynor explained that for years counties have argued that property tax is a poor source of funding for social services. The reasoning behind this argument is that unlike roads, streets or fire protection – which have a direct link to value of property – social services is more of an indirect relationship.  When counties looked to funding social services with property tax funds, it was hit or miss as some of the counties with the highest property values had the lowest social services cost, and some of those with the highest social services cost had the lowest property values.

“It makes it very challenging. We had counties levying 8 mills for social services and counties leveling 48 mills for social services, so the tax payers were not equally burdened for a service that is supposed to be provided equally in the state. We have always argued that there should be a different funding source,” Traynor said.

SB 2124 will reorganize the current system of 47 county social service units into no more than 19 human service zones. North Dakotans will now be able to obtain services at the closest social service office, regardless of where they live. All current access points will remain open, so those seeking services will notice few immediate changes. Behind the scenes, zones will be able to share staff resources, specialization and expertise.

“This landmark bill maintains all local access points to services while allowing us to respond better to community needs and promote innovation in service delivery,” Burgum said. “Social service team members will be able to spend less time on administrative tasks and more time working directly with citizens to address their needs.”

Cavalier and Pembina County Social Services director Jill Denault is looking forward to being able to give her clients more access points and services locally. By working with other counties, Denault thinks that it is very doable. She does concede that there will be some sticking points such as salaries and benefits for the employees as the redesign is planned. Needs of smaller counties versus larger counties is a concern as well. As the counties become zoned, the flexibility within the counties to utilize and share services becomes a reality .

“Being able to have a little bit more freedom to get more services in is my hope – that we can offer more locally,” Denault said.

SB 2124 is the culmination of years of effort. Legislation approved in 2017 directed the state to provide property tax relief by funding social services and to study the design of social service delivery. SB 2124 resulted from that study, with collaboration between the Department of Human Services (DHS), NDACo, the state legislature and county social service leaders, among other stakeholders. By continuing state responsibility for county human services funding, SB 2124 will provide more than $172 million in property tax relief.

“There has always been a fair amount of state funding just that most of it was property tax,’ Traynor said.

The new model still has a lot of similarities to what has been done in years past. The county or zones will develop their budget but now the state will have considerable input as it will be using state money. The state will approve the budget as well as the local board. Traynor compared the process to that of a block grant where the state and local will work together to have an approved budget. The funding of the budget will be split into two payments, once in January and once in June, to operate, and the amount can be adjusted for each six months as needed.

“I think everyone recognized we had to come to a new funding model. There is certainly some apprehension on bringing three counties together,” Traynor explained.

Apprehension and skeptical is exactly how Cavalier County commissioner and Social Services board member Stanley Dick feels as the process of implementing the legislation begins. Over the course of the initial pilot program that determined if this redesign was possible, hiccups and questions still remain as the full redesign process begins.

“Near-term, it wasn’t a positive. Long-term, jury is out on it yet,” Dick said.

The biggest concern for Dick as the counties prepare to implement the state legislation is where the funding for this will come from. As the process for the legislation to pass and become law moved forward, Dick was unable to get an answer on where the funds for this redesign will be coming from.

“I don’t’ know if it’s just me being skeptical, but I’ve still never seen how the funding is going to take place. I hear over and over and over from the state and from Association of Counties that there’s money there, don’t worry about it, there’s monies there. But I’ve never seen yet, specifically, how it gets funded,” Dick said.

Despite these concerns Dick and the rest of the Cavalier County Commission have been proactive in preparing for this legislation to be passed. Cavalier County will hopefully join with Pembina and Walsh counties to form a zone in the northeast corner of the state. Questions of how the relationship between the state providing funding and the local zoning boards having control over employees are understandable heading into the planning process.

“We would like to keep it as local as possible, but I’m not really sure where the state is going to come down on all this,” Dick shared. “It’s kind of a conundrum. You’ve got state funding and how can you have local control? I still can’t work that through in my mind because if you have state funding, my mind, they’re going to want more control.”

The bill does guarantee that every current employee will maintain a job and that the salary will not decrease. The employees stay locally employed and will be considered county employees. However, there are some services that will be better delivered coming from the state level rather than the zone level.

“A good example is subsidized adoption. Every county now has to have a staff person that is an expert in subsidized adoption, however, when you look at the workload- it’s probably a workload for about two people statewide,” Traynor explained.

In addition, at the state level, four positions will be created that will work as a coordinating role with the zone directors. These coordinators will work with the zone directors as a liaison to the state when developing budgets.

Overall, the NDACo is very satisfied with how SB 2124 turned out. Traynor explained that there were a lot of suggestions for the original bill draft that were implemented, and while there is still some language that leaves more to be desired, the bill is 90 percent what NDACo wanted.

“We are quite pleased with it,” Traynor said.

Counties will have until the end of 2019 to work together to form zones. Next year, each zone will select a director and create a plan for zone operation. Throughout the biennium, zones will collaborate to roll out pilot projects focused on specific programs to improve processes.

“It’s going to be challenging- the next year, year and a half- as we develop this,” Traynor said.

Counties have until December of 2019 to create the zones and the counties included in each zone. Those zones then have six months to develop their organizational structure – their plan, their board, how the zone will operate – and that plan needs to be put in place by June 2020. However, those plans will not take full effect until January of 2021 allowing time for implementation and any necessary tweaking.

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