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Division III proposes phased repayment to counties of unallocated FMAP funds, temporary 1% county cap increase
Summary
Committee leaders proposed repaying counties for federal Medicaid FMAP distributions that were retained at the state level during an early COVID-era FMAP enhancement, splitting approximately $22.5 million into four payments and adding an exigent one-percentage-point county cap premium that would expire at the end of the biennium.
Division III members discussed restoring federal Medicaid FMAP-related money counties say the state retained during the first six months of an enhanced FMAP allocation. Committee staff reported the disputed amount is about $22.5 million; rather than a lump-sum payment, county representatives agreed in hallway talks to accept the sum in four equal installments spread across two budget years.
Under the proposal, counties would receive four payments of $5.625 million each, effectively crossing two fiscal years and smoothing the state's cash-flow effect. Committee members who discussed the arrangement said they spoke to county representatives, including David Ross and Chuck Nickerson, who told legislators they did not anticipate opposition to a phased payment plan but had not conducted a formal countywide vote.
Separately, Division III advanced a temporary modification to the statutory county-cap law. New Hampshire's county-cap statute generally limits annual county property-tax increases to 2% to stabilize county billings; the division's HB2 amendment would raise the cap to 3% for the biennium, citing "exigent circumstances." The language included an explicit sunset provision to restore the 2% cap at the end of the biennium so counties would not expect a permanent change.
Committee members said the exigent premium was tied to the phased repayment: the proposal would hold back part of the phased payment (about $1.3 million in year one and $2.7 million in year two) to offset the one-percentage-point premium, easing the state's fiscal stress while giving counties some additional capacity for the current cycle.
Ending: The chair said the amendments were being introduced for committee consideration; members asked staff to circulate the exact HB2 amendment text and to reconvene for votes in the next session.
