Zee Lamb has witnessed better days. Ditto for Wayne Jenkins and John Ed Whitehurst.

Those three men – respectively serving as county managers for Bertie, Northampton and Hertford – received the bad news on Thursday after learning there were no funds for Medicaid relief included in the budget proposal being considered by the North Carolina Senate on Wednesday afternoon.

To make matters worse, the Senate’s proposed spending plan diverts $50 million from the Public School Capital Outlay Fund, which is a portion of the corporate income tax that is earmarked to help counties pay for new school construction, to the school’s general operating fund.

That comes as bad timing in both Bertie and Northampton counties where new schools are planned.

&uot;I believe the money already earmarked for our new middle school here in Bertie County is safe,&uot; Lamb said. &uot;From what I can understand from the wording of the Senate’s proposed budget, that money will be diverted down the road.&uot;

Meanwhile, Lamb expressed dissatisfaction over the Senate’s proposal not to provide Medicaid relief.

&uot;It’s unfortunate that the Senate would not include some Medicaid relief for counties, particularly for the distressed counties, given the information that we have provided them over the past six months,&uot; he said

&uot;The divide between the rich counties and poor counties in North Carolina will continue to grow as long as the General Assembly punishes the poorest counties for being poor by requiring counties to pay a mandated share of Medicaid.&uot;

Lamb continued, &uot;Because Bertie County is paying more than $2 million a year for Medicaid, we are not able to invest more in our schools or provide adequate law enforcement, recreation or other services that the more affluent counties in areas of the state are able to provide their citizens.&uot;

Bertie taxpayers send 33 percent of their dollars to Medicaid. In Northampton County, 17.5 percent of every dollar in property taxes is set aside to pay the Medicaid bill. Hertford County’s share is 22.8 percent.

Medicaid relief has long been the No. 1 legislative goal for North Carolina counties. North Carolina is the only state that requires counties to pay a fixed percentage of the state’s Medicaid burden. New York recently took steps to phase down their county share by capping its counties’ contributions.

In recent years, counties around the state have been forced to either raise local property taxes or cut local services to pay the county share of Medicaid, a federal program that is administered by each state. The county share is expected to be $450 million for the 2004-05 fiscal year, an increase of 67 percent in just the last five years.

Medicaid is a federal health program for the poor, elderly and disabled. Each state administers its own Medicaid program but receives the bulk of its funding through the U.S. Centers for Medicare & Medicaid Services (CMS). Counties do not determine which services are offered, who is eligible to receive the services, or the provider rates. The state and federal governments set all eligibility requirements. In recent years, the state has voted to provide additional services beyond the minimum required to receive federal funding and to make more people eligible for services, thereby increasing the county costs.

The Senate budget also proposes eliminating the current Public School Capital Expense Fund, which each county receives based on its Average Daily Membership in the public school system, after 2006-07 and creating a new fund, called the County Assistance Fund, that would receive $150 million annually from state lottery proceeds, beginning in 2007-08. For 2005-06, the Senate budget directs that $70 million of lottery proceeds go to the existing ADM fund to help counties pay for school facilities.

&uot;Counties are mandated to build and maintain our public school facilities,&uot; said NC Association of County Commissioners Executive Director C. Ronald Aycock. &uot;In recent years, the General Assembly has mandated smaller class sizes in the lower grades, and this is at a time when our state is one of the fastest-growing in the nation. These two factors are requiring counties across the state to provide additional classroom space.

&uot;Taking $50 million from the ADM Fund this year and replacing it with the proceeds from a non-existent lottery is a gamble that our state leaders should not take,&uot; Aycock concluded. &uot;Counties are in the midst of creating their annual budgets for 2005-06 and any uncertainty over the ADM fund could cause many counties to raise taxes or cut services unnecessarily and could jeopardize the high bond ratings that our counties have worked so diligently to earn.&uot;