Burke County manager projects revenue gains but warns of $2M Medicaid hold-harmless losses

Burke County’s midyear financial report, presented March 16 by County Manager Brian Epley, showed continued revenue growth driven by sales tax and motor vehicle rebound but warned of significant recurring revenue reductions tied to changes in Medicaid hold-harmless calculations.

Epley told commissioners the county has seen a roughly 3.5% increase in property-tax revenue and a 7.5% gain in the county’s point-of-sale sales tax (article 39). He said investment income that had totaled more than $2 million in prior years will likely decline as the county spends down cash and federal interest rates fall.

On net revenue risk, Epley said Burke County has lost over $2 million in recurring revenue across the last two years as a result of changes to Medicaid hold-harmless distributions: "Burke County is now getting zero," he said after describing the state algorithm that compares repealed sales-tax receipts to state-paid health claims. "We've lost over $2 million in recurring revenue in the last two years for Medicaid hold harmless."

The manager also flagged rising costs: increasing retirement contribution rates, higher medical insurance claims (with a small number of high-cost claimants accounting for a large share of plan costs), and double-digit increases in insurance renewals. He credited department-level efficiency measures — in-house EMS billing, consolidated solid waste transport and position-management — with helping preserve a healthy fund balance.

Commissioners accepted the midyear report. Epley said the report will inform the FY26–27 budget development and that staff will continue to monitor revenue and cost pressures.

Why it matters: the revenue shifts and lost state support from Medicaid hold-harmless changes affect the county’s budget planning and the board’s ability to make decisions about service levels and capital projects going into the next fiscal year.