FINAL BILL REPORT

                  HB 1420

                         C 333 L 97

                     Synopsis as Enacted

Brief Description:  Modifying local public health financing.

Sponsors:  Representatives McDonald, Regala, Huff, Talcott, Conway, Smith, Mitchell, Fisher and Bush.

House Committee on Appropriations

Senate Committee on Ways & Means

Background:  The Health Services Act of 1993 amended the distribution of motor vehicle excise taxes (MVET) between cities and counties for local public health purposes.  The MVET distribution percentage to cities for public health was reduced by 2.95 percent and the counties' distribution percentage was increased by the same percentage.  The change in the city and county distribution percentages was originally scheduled to take effect July 1, 1995.  An analysis using the revised distribution percentage identified that the 2.95 percent shift from cities to counties would result in certain cities contributing less funding to support local public health services than they were providing before the 2.95 percent shift.  The effect was that certain local health jurisdictions would receive less funding for public health services using the new distribution percentages.  The statewide funding shortfall was estimated to be $2.25 million.  The provision of $2.25 million would enable county health departments and local public health districts to continue current levels of service after July 1, 1995, the effective date of the shift.

In 1995, the Legislature attempted to resolve the county and local public health district funding problem by establishing a funding benchmark that would ensure that no city contribution was less than the calendar year 1995 level expended for public health purposes.  The implementation date of the revised distribution percentages was also extended to January 1, 1996.  The 1995-97 Appropriations Act contained the funding to ensure that city contributions met the required calendar year 1995 levels.  This was accomplished by a $2.25 million state treasurer transfer from the state public health services account to the county public health account.  The county public health account was created to provide a means to distribute funds to local public health entities.  The 1995 legislation did not address the inclusion of  populations in cities that were in the process of incorporating at the time the 2.95 percent shift problem was being corrected.  The populations in these newly incorporated cities were not recognized in the new distribution formula and, as a result, certain local public health jurisdictions were still underfunded.

The director of the Department of Community, Trade and Economic Development is required to certify the amounts for distribution to each local public health jurisdiction using actual 1995 city public health contributions as a base.

A portion of all MVET receipts are deposited into the county sales and use tax equalization account for allocation by the State Treasurer to counties meeting certain criteria.  After all county equalization allocations are made, the unexpended balance from the county sales and use tax equalization account is deposited into the state general fund.

Summary:  Populations in newly incorporated cities are included in the calculation of city contributions to counties for public health purposes.  (This corrects the funding calculation adopted by the 1995 Legislature.)  The unexpended balance in the county sales and use tax equalization account is used to cover the cost of including the excluded city populations in the local public health funding calculation.  The two local public health jurisdictions affected by this funding correction are Seattle/King and Tacoma/Pierce.  After the allocation for local public health, the remaining balance in the county sales and use tax equalization account is deposited into the state general fund.

Votes on Final Passage:

House  88 9

Senate 44 5

Effective:July 1,  1997