N.C. Senate committee approves Medicaid swap with counties

RALEIGH (AP) — Counties would be relieved of their Medicaid burden by mid-2009, but wouldn't be allowed to issue more taxes as well in a bill that finally cleared a Senate committee.

Both the House and Senate have been looking for a way to eliminate county expenses for Medicaid, which are expected to exceed a half billion dollars this year.

Talks on the subject were halted two weeks ago when the Senate declined to agree to a broad tax package attached to it that would have allowed counties to raise a land transfer tax, with local voter approval.

Senate Democrats continued to work on a solution, and the proposal that passed the Finance Committee would let the state take revenues from a half-penny of the sales tax currently kept by local governments in exchange for taking over the taxes.

With other things unchanged, the bill means that the sales tax would remain at its current rate of six and three-quarters percent. The bill now goes to the full Senate.

(Copyright 2007 by The Associated Press. All Rights Reserved.)