And I think that's county government, is you'll
never have enough resources. And so you always
have to be thinking creatively. You got to be
thinking about partnerships. You got to be thinking
about priorities. Welcome to County Connection.
the official podcast of the Washington State
Association of Counties, where we dive into the
legislative issues shaping the future of our
communities. From budgets to public safety, infrastructure
to elections, we'll break down what's happening
in Olympia and how it impacts counties from across
the Evergreen State. Stay informed, stay engaged,
and join us as we amplify the voice of Washington's
39 counties. Welcome to County Connections. I'm
Derek Young, Executive Director of the Washington
State Association of Counties. By now, listeners
of this podcast are used to hearing from Paul
Jewell. He'll continue to provide you with essential
policy updates and in -depth analysis of the
issues that matter most to counties. But we also
wanted to expand on that a bit and talk to more
of our partners. With things heating up at the
federal level, I couldn't think of a better way
to kick things off than invite our friend Matt
Chase, Executive Director and CEO of the National
Association of Counties. Derek, thanks for having
me. Great to be on and congratulations on your
full -time appointment. And just, we really look
forward to partnering with you. Thanks. I appreciate
it. Yeah, it's been a long journey too, because
I enjoyed interacting with you and your team
when I was a member a while back and got to participate
in lots of NACO policy development and work on
the committee. So thanks. Well, thank you. Well,
you just weren't active. You were chair of our
health committee, and that was really important.
I think we'll dive into health at some point
today, just broader what's happening with federal
policy with health. But I think especially for
Washington State's counties, what's going to
happen with behavioral health is going to be
front and center. Yeah, absolutely. We'll definitely
dive into that. But first, let's chat a little
bit more about you and your background. So I
was interested to learn. I didn't know this until
we started doing a little research. Our team
of researchers, you know, started looking into
you and we discovered that you actually kind
of grew up around county government. Your stepfather,
I believe, was a county district attorney and
judge. Yes. And in fact, I'm. After annual conference,
I'm taking a couple of days. I'm still working,
but I'm up here in upstate New York, up in the
Adirondack Park where I grew up. And I grew up
in two different counties, neighboring counties.
One of them, Washington County. Yeah, great name.
It is more of a dairy farming type county, huge
agriculture and a little bit different landscape
than the bordering county, Warren County. is
more mountains and lakes. It's the foothills
of the Adirnick Park. It's the largest state
park in the lower 48, about 6 million acres.
So when we talk about public lands, I grew up
living inside what's called the Blue Zone. It's
a very unique state park. It's the oldest state
park going back to Teddy Roosevelt era. And half
the acreage is private, half is public, most
of it wilderness forever. And so that's really
where I get my understanding of federal public
lands is growing up in a in a state system that
actually kind of was a precursor to what became
the federal public land system. Yeah. You know,
coming from the Western perspective, we don't
think of eastern states as having, you know,
as many public lands. And that's really fascinating.
I didn't know that background. Yeah, the lake
I grew up on, I'm sitting here in Lake George,
New York, and over 13 miles of lakefront on one
side of the lake is actually wilderness forever,
never to be developed. And so that really does
impact taxation. It impacts land use. It's also
great for tourism. But again, it's all balance.
When you're talking land use and public lands,
it's always tradeoffs. And it's great to have
some concentrated development. on the lake, but
then have this beautiful wilderness forever.
Keeps the water pristine. We actually drink right
out of the lake. Our house has a pipe right down
to the water, and that's where we get our water
from. Oh, no kidding. Well, so I'm curious. You
went to, but that must be the connection to where
you went to school, Hartwick College. I'd never
heard of that before. Well, it's a small liberal
arts school in upstate New York. In fact, I just
joined the board of trustees and was on a A board
orientation this morning talking about the survival
of these small liberal arts schools across the
country. And it's a great little school, only
1 ,600 students. When I was there, it was a top
20 Division I soccer school and had won the national
championship, mostly Division III sports. And
I was a scrub basketball player and really enjoyed
it. But I think the beauty of liberal arts...
is it teaches you multifaceted thinking. It teaches
you critical thinking skills and to be creative.
And I think that's county government is you'll
never have enough resources. And so you always
have to be thinking creatively. You got to be
thinking about partnerships. You got to be thinking
about priorities. And so I think it really was
a great training ground for serving America's
counties. Yeah, I was always a little jealous
of talking to very similar colleges. You know,
my area in Washington, small liberal arts colleges,
and I went to large state school and kind of
hearing that experience about how their education
worked. I was I was a little jealous, I hope,
to be honest, because we didn't have that same
collaboration kind of work. It was very much
on your own. Yeah, well, I think there's there's
benefits to both. And, you know, going back to
you asked me about my upbringing. I also used
to work for the town highway department in the
summers. and dealt with gravel roads and ditch
digging and cleaning out culverts and flagging
and doing paving. And I think all those life
experiences really are playing out today with
what we're going to talk about with federal policy.
I think how we are brought up, particularly in
rural communities, going to small schools, very
community feel, really having to bootstrap everything.
Again, has prepared me and I think my family
for working in public service and working with
counties. Yeah, I think the summer extra hire
is like the classic entry into county government.
You know, I've known so many people that that's
how they first get into it. And that because
they don't know much about counties. Right. I
mean, I literally was working in the dump and
it was called the dump back then. It wasn't a
fancy like solid waste facility. And we were.
moving gravel, getting stone, and really very,
very early stages of recycling programs and help
stood up recycling program. Even when the markets
didn't exist to actually recycle the goods, we
still were sorting and really dealing with dump
closures at that point when EPA was really coming
down on local governments for the quality of
our facilities and making sure we were protecting
land and water quality. And so just a lot of
great life lessons. And also the politics of
working on a local road crew and which roads
get paved and which gravel roads get raked and
how you deal with dust that gets into people's
house. Like those are real world issues that
our members are dealing with. Yeah, I've always
said that the most controversial thing you can
do is not work on someone's road or work on someone's
road. It both seem to generate the most phone
calls. Exactly. And where I grew up, we get a
lot of snow. Snow plow removal is as political
as it gets. Like who gets their road plowed first
really matters. When I was on city council years
ago, I used to tell the road crew, we didn't
get as much snow, but when it happened, it's
catastrophic because it's so hilly. And whatever
you do, do not plow my street first. Just like
make sure it's towards the back of the line.
Oh, that's fun. I don't want to deal with it.
So let's get into it. I want to talk a little
bit about the association in general. So you
represent over 3 ,000 counties. I can't even
imagine how many employees. What is it, like,
in a million? 3 .6. Wow. About 2 % of the American
workforce. About one out of every 50 workers.
in this country are employed by county governments.
That's incredible. And yet the thing, and you
talk about this a lot in terms of counties tell
on their own story, is we're probably the least
noticed level of government. Like most, I always
say, most folks who know who their mayor is and
like, you know, maybe their legislator. But if
you want to run for county government, you know,
you're not running to get your, you know, name
in the paper. Yeah, we just celebrated our 90th
anniversary of NACO and also kicking off America's
250th celebration. And we had one of the county
leaders from James City County in Virginia featured
at our conference. And I joke with the chair
of their board that the county branding problem
started in 1634. When the first eight shires,
which became counties, three of them are called
city county, even though there's no city within
the county. And I think our branding problem
literally started on the shores of Williamsburg,
Virginia. And also just the way counties were
built to be checks and balances that, yes, you
have a legislative body with the county council.
And in most cases, it also has the executive
branch, although. In your big urban counties
with the elected county executive, there's a
differentiation between the executive and legislative
branches. But then you have all these independently
elected district attorneys and clerks and treasurers,
which is a strength of counties. It really creates
a checks and balances, but it also creates a
branding problem. Who's actually in charge of
the county? And the answer is many. And so I
think that was by design. And but it is a challenge
from a branding perspective, but from an operations
perspective, it's probably been beneficial over
the years. Yeah, it's it's something that we
frequently talk to legislators about because
they'll get frustrated with something that a
county is doing. And what you really find is
like, well, that's a separately elected official
that's doing that or it's a judge or it's a sheriff
or whatever. And, you know. By design, you know,
our membership, because we're a divided county
organization, the rural offices, like assessor,
treasurer, all those are in a different one.
But, you know, they have their own, you know,
political authority by right constitution and
statute. And so we don't speak as one voice.
And very often they're kind of different constituencies
as well. Right. Yeah, and I think your audience
with the county commissioners, county council
members, and a couple of your elected executives
are really going to have a tough go in the next
couple of years. And they are really responsible
for the county purse and really figuring out
how to allocate the budget, how to navigate if
you're going to take on debt financing, particularly
for capital infrastructure. What we're going
to be talking about is we're entering this era,
and we anticipated it. When we were in the COVID
era, obviously a lot of federal money was flowing.
There was a lot of uncertainty about the economy.
There was certainly the public health crisis.
And what Congress did, some people like it, some
people don't. But it was based on the lessons
learned from 2008 with the housing crisis, where
when the economy really suffered in 2008. Private
sector came out of the recession faster than
the public sector. And the public sector, mostly
state and local government, was a real drag on
our overall national recovery. And so when we
got into the COVID era, Congress, and it was
bipartisan at some point in the process. It wasn't
always bipartisan, but President Trump supported
these big bills the first go around. And working
with the Democratic Congress, they said, we really
need to invest in state and local governments.
So when we come out of the pandemic, state and
local is out of drag on the economic recovery.
But we knew on the back end, the pendulum would
swing back and we would have some years of austerity
and federal cuts. And we certainly are starting
to see that. We're going to talk through today,
I think, the big, beautiful bill, which is a
big reconciliation bill. It's the largest fiscal
bill in our country's history. I think it's really
hard for folks to grasp just how big this bill
is, along with the annual appropriations process.
And we're seeing a lot of issues with executive
orders, agency decisions, that NACO's role, just
like WASAC with the Washington... State Association
of Counties, is we're an intergovernmental player.
We're not a partisan player. We're an intergovernmental
player trying to represent the county voice with
federal, state, local, tribal officials. And
so our job, just like your job, is to be an advocate
for county governments and to make sure county
officials are aware of these federal decisions,
try and influence them where appropriate, and
then really figure out how do we navigate them.
Because one thing we've learned over decades
is status quo is not an option. The mix of players,
the mix of the majority at the federal level
changes every two years. And if you're hoping
for status quo, you're like in the wrong business
right now. It's going to change. And I think
the role of NACO as well as Washington County's
is how do we help county officials adapt and
how do we learn? and really with an eye towards
serving our local communities the best we can.
One thing I've always appreciated when I've heard
you talk to our group or to members is emphasizing,
because we can wade into some waters that are
tricky. Some of our members may be in favor of
decisions that are being made that organizationally
we have to work on. You know, talking about NACO,
and this is true of WASAC and our counterparts
as well, that we're nonpartisan, but we are political.
And I like how, you know, it emphasizes that,
you know, being nonpartisan doesn't mean we don't
have a viewpoint and that we have to advocate,
you know, aggressively for it at times. Yeah,
and I think when you start to think about public
policy. What is public policy? It's really about
setting priorities. And for county governments,
we tend to get assigned what the federal and
state governments don't want to do themselves.
We tend to get assigned really expensive, complex
societal issues. When Washington state counties
are dealing with behavioral health, they're not
just dealing with just. a mental health issue.
It's often co -occurring substance abuse. And
oh, by the way, there's probably chronic health.
There's probably housing issues. There's probably
multi -generational issues. And so I think our
task is to really make sure federal officials
understand the multi -dimension nature of local
issues that when we're dealing with a disaster
recovery. Yes, housing is front and center, but
also the economy, people's jobs, people, family,
behavioral health issues. You know, there's so
much that goes into this. Most of our funding
comes in silos, but the practice on the ground
is intertwined. And that's what we're trying
to make sure our federal officials understand
is when we're dealing with things like SNAP,
the nutrition program, There's a lot of debate
about this. And all we're trying to do is say,
really, who are SNAP recipients? And you get
into things like work requirements. Okay, we
have been supportive of reasonable work requirements.
We want to streamline the administration of those
work requirements because there's some real cost
to counties that administer that. But when you
look at it, mostly we're talking about children.
And so when you're... Political rhetoric is around
work requirements, but yet most of the recipients
are single moms with children and very young
children. We just want to deal with the facts,
and we want to really make sure our members have
the flexibility to serve their communities. And
one takeaway, I think, for your listeners is
NACO doesn't believe, like our board of directors
has had a lot of discussion, we don't believe
the federal government has an unlimited checkbook.
just like state and counties don't. And we understand
the need to get a control on our debt and our
deficits. What we don't like that's happening
is we're actually not tackling debt and deficits.
They're actually growing. And yet the cuts they
are making are mostly to state and local programs,
things like Medicaid and SNAP and potentially
in the disaster world. And so we just want to
continue to have a seat at the table. have really
mature conversations about what's the appropriate
balance between federal, state, and local responsibilities
and tribal as well. And we have real issues that
you're dealing with at the state level, as well
as the county level, from public lands to behavioral
health to disaster mitigation to transportation.
Like these are expensive issues that we're talking
about. Yeah, and it's hard for our members to
try to find resources for that locally. You know,
there's been this devolution of responsibility
really over decades, but it's really accelerating
now. And there's this, I guess, a belief, and
this is true, like in our state, one of the most
devolved, you know, systems of government you'll
find where the bulk of our budgets at the county
level are revenues that can be raised locally,
which obviously is wildly disparate and creates
lots of inequities across the system, especially
since almost all the criminal justice system,
for example, from the courts, the prosecutors
and public defenders, it's all paid for with
those local funds. So that's kind of happening
as well at the federal level. So let's, you know,
since you've touched on it quite a bit, why don't
we just go to what I wanted to talk to you about?
And it's, you know, NACO is known for its research
and Really does a tremendous job. But your team
really outdid themselves this time with the big
shift report. It's really an exceptional piece
of work because there's so many things going
into these big bills that, you know, I think
it can get kind of lost. And it's our members
are trying to wrap their brains around it. So
why don't you talk about that report and some
of its findings? Yeah. And before I do that,
you know, just thank you on the comment on research.
And yes, we're doing a lot of policy research.
But one of the things that we're also doing that
helps us understand the impact of federal policy
decisions at the local level is the research
that we're doing on every county in the country.
We have developed these economic profiles that
look at population changes, GDP changes, demographic
shifts. So that we understand about a third of
the counties in the U .S. are growing, about
a third are stagnant, and about a third are in
decline. And so when we talk about the big, beautiful
bill, we're not thinking about counties as monolithic,
that all counties are the same. And not just
urban, midsize, and rural counties. Even within
those, you've got some that are exploding with
growth, some that are severe decline. And what
we're really trying to do is understand. the
ability of each unique county to respond to all
this change. And we're really trying to build
networks of counties to think through their future.
And it's not NACO's job to tell a county what
they should do. It's our job to help them with
whatever their local vision is. So when you get
into the big, beautiful bill, which, again, is
the largest budget bill in our nation's history.
It's three times the size of the American Rescue
Plan, and it's actually larger than the American
Rescue Plan, the CARES Act, the CHIPS Act, which
was about semiconductors, the Inflation Reduction
Act and Infrastructure Act combined. That's incredible.
I don't think most people could even fathom that.
Right. So we're talking easily over $5 trillion
in fiscal impact. The basis of reconciliation
and why do they do reconciliation? All reconciliation
is it's a fancy term to say in the Senate in
particular, you don't need 60 votes to pass this
bill. There's supposed to be budget bills that
deal with the debt and deficit. They really aren't
supposed to be legislative. I would call this
bill more of a hammer than a scalpel. Like it's
supposed to really be a budget bill and not an
authorization bill. And primarily dealing with
tax code and with mandatory spending. Medicare,
Medicaid, Social Security, veterans, those kind
of snap mandatory programs. So what this bill
was really focused on was extending the 2017
tax breaks. So when they passed what they call
the Trump tax bill in 2017. The vast majority
of the corporate tax provisions were made permanent,
except for some ones around research and development
and a couple of other smaller ones. But most
of the corporate provisions were permanent. What
they did to lower the cost of the bill is they
made the individual tax provisions for individuals
and certain types of small companies or certain
type of partnership companies. They made those
temporary and they expired this year. And so
the number one drive was to extend the individual
tax breaks. So, quote, there wouldn't be a tax
increase. And that was smart politics on the
Republican side because they knew it would be
politically more difficult to extend corporate
tax breaks versus individual tax breaks. Where
we come into play is counties. is to extend those
tax breaks cost trillions of dollars. And they
needed to try and find some offsets. So the Congressional
Budget Office says that this bill will increase
debt by about $3 .5 trillion. That's probably
going to be the low number. But they also did
offset some of the tax breaks. So at the end
of the day, the cuts to Medicaid... are going
to be about a trillion dollars over 10 years.
The cuts to SNAP will come in probably below
$200 billion, the way they did it at the end.
But we also had some positives in this bill,
and I think we should highlight a couple of the
positives as well. We were able to defend taxes
and municipal bonds. Municipal bonds were on
the chopping block. Not because anybody has any
philosophical problem with them, but it was one
of the largest potential federal revenue raisers.
If they had cut back on municipal bonds, they
could have generated over $200 billion in new
federal revenue. That was something that we really
pushed pretty hard to stop. Yeah, and when you
go back to NACO's role in what is intergovernmental
relations, tax and municipal bonds have been
around. predating the IRS tax code in 1913. They're
a capitalist system, right? State local governments
go to the private markets. Your interest rate
is based on your credit. The better your credit,
the lower the interest rate. A significant number
of missile bonds have to be voter approved. They
definitely have to be approved by a county board,
but often require voter consent. I mean, where
are you going to find a flaw in that? And as
we've argued, it's not lost federal revenue because
muni bonds predated the federal income tax code.
So the way it gets scored is that the federal
government's losing money, but it was money they
never had. And state and local governments have
been issuing municipal bonds going back to New
York City far before the 1913 tax code. Now,
Congress may come back and do a second reconciliation
bill. And so we don't think this fight is over.
The proposals that were floated early on that
never made it into the big bill would have increased
state and local borrowing costs by about 210
basis points. So about 2 .1 percent. And of course,
it depends on the spread between municipal bonds,
tax exempt bonds and taxable bonds. And that
does vary. But it would have increased state
and local borrowing costs about $800 billion
over 10 years. So a really significant fight.
We don't think it's over, but we're going to
continue to put pressure on. It's important to
note that how much more impact that creates than
what it actually would save the federal government.
So for a small amount of money, by comparison,
I should say, for a much smaller amount of money.
they can actually save government overall around
and their partners and state and local government
much more. Right. And what's really important
for folks to remember about this debate over
tax and municipal bonds, one, state and local
governments pay more, meaning your taxpayers
pay more because your borrowing costs go up.
It costs, it would be over 200 basis points typically.
with the lenders. But how the federal government
raises money isn't from state and local governments.
It's actually from the bondholders. Bondholders,
their investment returns would now be taxable.
And so they'd basically be paying capital gains
on that. And who owns most municipal bonds are
elderly. They're safe investments. So they've
gotten out of the stock market and they've put
their money into safe. maybe lower returns, but
that's who's getting punished if they end up
taking away the tax status. So it's both the
local taxpayer and the bondholders. And I think
that's why at the end of the day, they left them
alone. But housing is another huge issue facing
counties across the country, and I know in your
state as well. And they did increase the volume
for the tax credits for low -income housing tax
credits. That's a good thing. The new markets
tax credit was extended. Also, I think, you know,
I know Wasik has done a lot of work on renewable
energy and the growth of wind and solar. And
there is a new renewable energy revenue sharing
on public lands, on federal public lands that
mirrors the oil and gas revenue sharing models.
So 25 percent of the revenue from wind and solar
energy produced on federal lands will be a revenue
share. down to state and local governments, especially
with counties. So there were some good things
in there. On the conservation front, they basically
took a lot of the farm bill programs for conservation.
And the outlook for the farm bill is not great.
And so they took a lot of the commodity programs
and conservation programs and put them into this
reconciliation bill. And so those are some of
the more positives, but we have real significant
concerns. about the Medicaid and SNAP issues.
And it really goes back to the county role in
indigent care, uncompensated care, and healthcare,
and being really the last resort, the social
safety net provider at the ground. Yeah, to me,
you know, unlike a lot of estates in Washington,
we don't really have, there's one county -run
hospital. Mostly they're in districts if they're
public. you know, some other relationship. But
at the same time, we see those downstream impacts,
for sure. You know, it impacts public health,
it impacts our justice system, it impacts, you
know, all of these outcomes that we're constantly
trying to work on. And that's where it shows
up, at least for our members, the most. You know,
Derek, you hit it there, I think. When you were
chair of our health committee and just when you
were at the county, and I know counties across
Washington State have been very involved in our
Stepping Up campaign. We just had a 10 -year
celebration where over 10 years ago, the number
one issue facing counties was the over -incarceration
of community members for mental health issues.
Not for crimes, but when someone had a mental
health crisis. We call 911 and we ask the sheriff
and the sheriff deputies to come deal with it
rather than a mental health professional. And
we saw through the criminal justice system, going
back to my background with my stepfather who
raised me being a district attorney and a judge
and my mother's a mental health professional,
I've seen it firsthand. And have just seen the
extraordinary cost to society, both to residents,
but also the taxpayers on when you're using prosecutors,
public defenders and judges to navigate a mental
health system. It's really expensive. And we
were getting poor outcomes. And I think our concern
is we are always going to support getting rid
of fraud and abuse in any public system. We're
always going to support doing really. due diligence
on who's eligible for these programs. But what
we are concerned about is all this progress in
mental health is going to take a step back. We
don't want to see our jails, and not that we
have gotten over this because it's still true,
but we don't want our jails to be primary health
care facilities, particularly for mental health.
That's not our goal. Yeah, I, you know, I'm not
sure if this is true in every state, but certainly
in ours, you know, I was struggling to find a
crisis center in a large urban county. We didn't
have any in Pierce County for for some time.
And so I would know we actually do have a large
mental health facility. It's called the county
jail. Right. So it's not that we're not trying
to provide some care. We're just doing it possibly
in the most ineffective method you could think
of in an environment that is not therapeutic
and, you know, extraordinarily expensive. Well,
you know, 10 years ago when we started working
on this, our biggest problem was finding financing
for capital infrastructure to actually build
facilities. Yeah. Then the CARES Act comes, the
American Rescue Plan comes, and counties across
the country finally had money to improve, obviously,
our public health facilities, but also our behavioral
health facilities. And we were able to build
short -term crisis centers, de -escalation centers,
alternative booking centers. Now we can't find
the workforce. And that's the frustrating part,
I think, for counties is money is a problem,
but so is the workforce. And when we talk to
county managers, county administrators, department
heads, the number one issue facing counties really
is finding the talented workforce to carry out
all the needs. And so I think when we talk about
Medicaid and SNAP, particularly for your state
and in those states where the counties administer
these programs, Those are really tough positions.
Those are burnout positions that have high turnover
rates. And that's going to be a challenge. And
we're going to need to innovate. Technology will
be part of the solution, but not the sole solution.
And so in a state like Washington, where the
state government handles the Medicaid and SNAP
administration, I think what your county officials
need to be prepared for is your upcoming budget
cycles. that your legislature is really going
to struggle to backfill these federal cuts in
Medicaid and SNAP. And so while it may not impact
counties directly, it will indirectly when the
state has to scramble to find hundreds of millions
of dollars from other programs to shift into
Medicaid and SNAP. Yeah, that's certainly true
here in Washington. You know, we think it's in
the four or five billion dollar range for the
state. And at the same time, our Supreme Court
handed us a little gift for our public defense
system, requiring us to triple the number of
attorneys, which we figure is probably going
to be about a billion dollars when it's all said
and done. So where are the states going to come
up with that kind of money? I don't know. So
I mean, almost certainly going to face some significant
cuts. Yeah. And, you know, things like public
defense, we talk about the U .S. Constitution
and the right to counsel and defense. I mean,
those are big constitutional issues and most
counties want to make sure their residents have
adequate public defense. But when you start to
look at the price tag on these things, they are
beyond the means of most counties. And of course,
you have tight property tax caps. And unless
you're flipping housing and able to read. reassess,
it's really difficult. Yeah, in Washington, we
have a cap on the property tax revenue. So it
really doesn't matter what it's valued at or
whatever. You know, they limit it in a different
way and it's only 1%. So over 20 years, that's
been slowly strangling us. Yeah, and Derek, I
think one of the things for county officials
that we need to think through of... As we say,
we like to come with solutions. We don't want
to come with the wine and W -H -I -N -E. And
sometimes it results in W -I -N -E. But, you
know, what we're trying to say to our county
officials is you ran to lead your communities.
You ran typically because you wanted to make
your community better. And you're going to have
a lot thrown at you from the federal and state
level. From a federal perspective. We're dealing
with funding cuts. We're dealing with kind of
this erosion of some of the social safety net
programs. We're dealing with what is the federal
role in disaster recovery? Should FEMA exist?
If FEMA exists, should it focus on mitigation
response recovery? Should it only focus on immediate
response, call it the first 72 hours? And then
it's up to the state and local governments to
figure it out from there. And of course, in a
state like yours, public lands management is
just huge. Whether it's fires, natural resource
extraction, endangered species, like there's
just a lot to navigate. And I think with these
bills and the research that you mentioned earlier,
we're just trying to chip away and help the county
officials think through how they're going to
make their community better. when they're giving
added responsibilities. And it can be overwhelming,
but what we're trying to do with these counties
is take it one bite at a time. That's one place
where I think our respective organizations are
essential, where it's that convening kind of
role, not only to deal with our partners, but
also to learn from each other so that our leaders
are figuring out. how others are navigating these
complicated issues and hopefully picking up some
best practices. Yeah. And, you know, not that
counties are unique in this, but what I love
about county governments is particularly our
elected officials, but also our professional
staff. They have really diverse backgrounds.
They have their professionals in something else.
And at some point they turn to public service.
They're farmers, they're ranchers, they're doctors,
they're business owners. They have all sorts
of skills. And I think what we need as a country
and what we need as an association is to crowdsource
that expertise and really identify what are the
different passions of our members and how do
we harness that. And so when we're talking about
Medicaid, for example, we have a lot of county
officials with expertise. They're doctors, nurses.
Maybe they're on the insurance side of the business.
They're facility operators. They know the real
-world impacts of these policies. And they're
on the front lines. And I think what we want
to do is listen to them and figure out what's
broken, but also what works and how can we scale
it up. Because, again, status quo is just not
going to be an option. Yeah, absolutely. Oh,
sorry, go ahead. You know, housing is an issue
that keeps coming up. And one of the things I'm
proud of is we recently launched a competition
and had limited funding. But this is just an
example of we had half a dozen counties participate
in a pilot of how could they use county -owned
land to build housing that's more affordable.
And you notice I didn't say affordable housing.
It's housing affordability. And particularly
for middle income, including county employees.
And within six months, we had a bunch of counties
that went from, yeah, they were exploring it,
but they dug into it. And now they're actually
building hundreds of units of new housing on
county owned land. And you need a public private
partnerships. Sometimes they sold the land. Sometimes
they held the land and leased it to a developer.
And that's basically saying. We can drive progress
if we put our mind to it and we prioritize. And
I think, again, coming out of all this federal
disruption, that's the mindset we have to have.
Yeah, absolutely. Yeah, housing is certainly
a significant issue here. One of the other things
that I wanted to touch on, because emergency
management is such a critical piece of county
business, obviously. We have a lot of disaster
responsibilities. There's been kind of an interesting
back and forth this year at the federal level
where it felt like we were finally making some
progress on looking for some reforms that we
do think FEMA needs. But now it also looks like
there's a potential, for lack of a better term,
disaster. disaster funding. And so talk a little
bit about what's going on with FEMA these days.
Yeah, so let's start with the data, going back
to research. And when we looked back 20 years,
we would have about 300 counties a year with
a disaster that reached the level of a federal
designation, a FEMA presidential disaster declaration.
And then it went up to 500 and then 700. In the
last five years, we were over 900 counties a
year. So almost a third of our nation's county
was having a natural disaster that qualified
for federal assistance. This last year, we were
actually over a thousand counties. And yeah,
some of that might be is the declaration dollar
amount keeping up with inflation and cost. Yeah,
there's some truth to that. But most of it is
these multi -billion dollar disasters and they're
occurring everywhere. And as executive director
of NACO, I travel the country and I often go
visit communities. I've been to Maui, been to
Los Angeles, been to Western North Carolina.
And everywhere I went last year, every community
told me it was the worst disaster in their history.
You know, Maui. lost 1 ,700 homes in literally
like 17 minutes. Los Angeles County, in the unincorporated
part, the Altadena Fire, lost over 9 ,000 homes
and structures. Wow. And just the speed of these
storms, and of course, in Texas recently, we
saw the horrific flooding. So what is going on
is the cost to the federal government keeps going
up. And there is... a debate on what is the appropriate
federal role in emergency management. And again,
breaking it down to mitigation, response, and
recovery, there's a debate of maybe mitigation
is more of a state and local. Maybe long -term
recovery is more state and local. And maybe the
federal role should be more limited to immediate
response. But we should turn it more over to
the states. And so I think it's a healthy debate.
NACO was critical of FEMA before the election.
Our president at the time, James Gore from Sonoma
County, who he lost over 7 ,000 homes in one
fire in his district within his county and had
actually three or four other fires. And then,
of course, flooding that comes with it. And so
he had a lot of firsthand knowledge of the challenges
with FEMA. But we never wanted the role of FEMA
to go away. We just wanted transparency on what
is eligible for federal reimbursement. We wanted
faster federal reimbursement because counties
are cash flowing billions in federal aid. Of
course, your county officials will know, particularly
things like debris removal, counties being up
front, and then it takes years for the federal
government to reimburse us. So we wanted transparency.
We thought you could build a website that showed.
Where is a county reimbursement request? Is it
at the state level? Is it at the FEMA regional
level? Is it at the FEMA headquarters level?
If a county didn't submit the proper paperwork
or follow federal rules, let us know and give
us a time to cure it within a reasonable time.
So right now, the president has a FEMA review
council that is looking at all these questions.
How did state and local governments handle disaster
management? prior to a stronger federal role?
What would it look like in the future? And we're
really trying to influence it, saying we can't
have the federal government step back. We certainly
are open to reforms. We certainly know state
and local governments have a role. But we also
got to bring in the insurance companies. We got
to bring in home builders. We got to bring in
realtors. We got to bring in all sorts of different
folks to look at it. But counties need to pay
attention because it's also about land use and
where are we going to build? How are we going
to build? And I keep telling folks, there's a
lot of reasons for our housing crisis. Some of
it's disasters that the cost to build in the
current climate costs more. If you go to Florida
and you see post -hurricane, you can tell which.
building codes the houses were built to, which
era of building codes. And that's costly. So
it's just this debate of do we pay up front or
do we pay after disaster? Yeah, I come from a
banking background. And the thing I've always
said when it comes to, you know, these disaster
-prone areas is, you know, it somewhat doesn't
matter what policymakers end up thinking because
the insurers and banks are going to make the
decision for you. The trick is to make sure that
it's done in a less chaotic way, because once
the banks have made their decision, we're not
lending here anymore. You know, you'll really
have a problem that is difficult to manage because
the community will begin to fall apart. You know,
everyone will have a race to the door to try
to exit before the market drops. Yeah. And going
back to our intergovernmental role and. What
I explain to folks, too, on the disaster front
is, yes, counties have a significant operations
role in emergency management. Most counties across
this country have emergency management departments.
We're typically the lead local agency working
with the state. We have significant roles and
responsibilities. But we're also a property tax
-based government. In K -12 schools and counties,
out of all the other governments, are typically
the ones that rely on strong property values.
The federal government lives off income tax and
capital gains. States typically live off of income
tax, although not all states, or sales tax. And
so for us, there's also this self -interest of
we want strong home values to fund our public
services. And so when we talk about disasters,
We're also talking about property values. And
I think we have a lot of self -interest that
other levels of government don't. And they don't
look at it through the same lens that we do.
Yeah, absolutely. So we're getting close on time
here. And I want to be respectful of your time.
But I also wanted to make sure we talked a little
bit about something that. NACO does for its members
and it's your edge program. We're actually launching
something kind of similar here in Washington.
We call it our solution center, which is finding
partners to improve efficiency, save money. But
in fact, I thought it was kind of funny at the
conference. I don't know if I noticed this before
and tucked it in the back of my brain, but your
edge program was cited in what was branded as
a solution center. And I thought, oh, no, did
I? Did I commit some sort of copyright infringement?
Not a hand. Well, we're an open source organization
anyways. So what are we talking about here is
what is happening in the private sector is companies
are becoming bigger and bigger. And why do they
do that? Because scale. Scale is king in the
private sector, whether you're banks, hospitals,
technology companies. And what we've thought
for many years is we need to combat scale with
scale. So when we talked about the size of county
governments at the beginning, counties invest
about $770 billion a year. If you took all the
collective budgets of counties across the country,
our purchasing scale is three quarters of a trillion
dollars a year. We have 3 .6 million employees.
But we also ensure about 8 million lives when
you look at family independence. And so all we're
simply trying to do is leverage the purchasing
scale of counties across the country for better
pricing, better customer service from private
vendors, and hopefully time savings. I think
a lot of counties, their procurement teams are
understaffed right now. They're overworked. And
some small counties might laugh and say, we don't
even have a procurement team. It's the clerk
to the board or it's a department head or maybe
it's even elected officials having to do it.
And so all we're trying to do is bring the expertise
of our membership together through our procurement
directors and other experts and go to the market
and say, if we could bundle our purchasing power,
Would we get better pricing? Would we get faster
response? Would we get better customer service?
And we've done it on things like elevators and
escalators to office supplies to other things.
I think the one that we're really excited about
is our PBM for prescription drugs. PBMs are complicated
and they're messy and they're basically a middleman.
Pharmaceutical spend has become a bigger part
of the health care spend. So basically what we've
tried to do is leverage our scale for better
pricing. And we're finding 20 to 30 percent savings
for counties purchasing prescription drug policies
for their workers and retirees, et cetera. And
that's the whole bottom line, whether Wasek does
it or NACO does it or we do it in partnership.
It's all about scale. We also are very careful
that when local counties need to use local businesses
and their local vendors, we always respect that.
We never prefer that. And we really try and focus
on things like take elevators. You know, there's
only two really big companies in the country.
So it's not something that typically you have
local manufacturers or expertise in. And so it's
an appropriate use to use national contracts.
And I think that's what we're trying to do is
help counties with your local businesses stay
out of that way. But where we can bring cost
savings, bring it bring that force to the table.
We recently had an example in Skagit County of
the pharmacy benefit and that buying power. They
were actually working with a consultant and which
is fairly common. And so they got the bid from.
from NACO Edge and the consultant did not believe
it. He said, I don't think these numbers are
right and challenged them and pushed back and
said, this doesn't make any sense for me. I've
seen what CBS, who is the provider, is willing
to do. And they had to kind of convince them
that, no, this is actually the deal that we negotiated
because it's a national pool rather than local.
You're so right. And we're hearing that over
and over where the consultants, brokers. haven't
seen pricing like this, except for a Walmart
or an Apple or some of these huge employers.
That's the whole point is when we employ 2 %
of the American workforce and even a higher number
of insured lives, let's use that scale. And what's
really unique about our program is the county
can still design their program to meet their
needs. They don't lose control. over the selection
of which drugs are in their lineup. It might
change the pricing, but it's not a one -size
-fits -all program. And so I think that's really
key is counties keep your local decision -making,
but you're leveraging the purchasing power. I
mean, our largest county in the country, Los
Angeles County, has 110 ,000 employees. But as
big as that is, maybe the seventh largest state,
They're still small compared to 3 .6 million
total. And if we can leverage the King counties
and the Miami Dades and Los Angeles to help midsize
and smaller counties with better pricing, I think
we should do it. Some of our midsize counties,
we've been saving anywhere from 10 to 15 million
dollars a year. And that's that's significant.
That's incredible. The other one that I was really
excited about and. you didn't have when I was
a member, but because I was in banking before
three plus one in our cash fest program, I cracked
up. I was at the, you know, NACIA, which is state
administration association directors. And you
and their team were kind of given an example
of how it worked. And I immediately clocked it
as, oh my God, this is such a brilliant idea.
I had, they basically reverse engineered the
way the banks make money off of our, our members.
and turned it into a way for them to save money
and make more money on their investments. Yeah,
Derek, thanks for bringing up 3 Plus 1. It's
one of my favorite programs. And just in full
disclosure, NACO actually bought some shares
in this company. Like, that's how much we believe
in what they're doing. They're not a broker.
Basically, they're analysts that look at your
daily liquidity, your cash flow, almost to the
minute. And they look at how can you generate
more interest income off your cash, but also
how can you look at your banking fees? Nago uses
3 Plus 1 ourselves. We were actually able to
generate significant higher interest on our cash.
But what we also found, for example, was if we
were still writing old paper checks, we had all
sorts of hidden fees. And if we did ACH payments,
it was like, less than six cents. We saved a
bunch of money just moving from paper checks
to ACH that you don't see on your statements.
It's not obvious that you're paying these fees.
And again, we're not trying to hurt the banks,
but we want to be good stewards of taxpayer dollars.
And we've helped generate over $2 billion in
new interest income and reduced bank fees in
a really short amount of time for counties. That's
unbelievable. Kauai County out in Hawaii. they
increased their interest income by $13 million
a year. Wow. That's incredible. Yeah. Boone County,
Kentucky, I think over $5 million a year. What's
really important, I think, for the treasurers
and others is they're doing a good job. These
are just new tools using supercomputers and algorithms
to do work much faster than it would take a team
of analysts days and months to do. Yeah, disinformation.
Right. But by no means are the treasurers not
doing a good job and they shouldn't be attacked
for coming in and raising more money. They should
be celebrated. But I think that's some of the
culture we're fighting is they get accused of
underperforming when it's like, no, these are
just new tools that weren't on the market before.
If I think back to how long I spent trying to
come up with. different return on investments,
calculating all of that out and now seeing what
I can do with just the click of a button. It's
incredible. And might as well take advantage
of that to save your taxpayer some money and
generate some additional income for your county.
And so just as we wrap up, I think the whole
philosophy of NACO and the Washington State Association
of Counties is... How can we be a strong advocate
on the policy side? But how can we also enhance
the tools for counties to stretch taxpayer dollars
and to make better use of our time? As I mentioned
earlier, when I talk to county managers and ask
them about their top concerns, you expect to
hear the political environment and the divisiveness
in the country. The number one answer I always
get is workforce. Workforce, workforce, workforce,
understaffed, got really good staff, but it's
hard to retain. And so the more we can help raise
money off of existing dollars, the more we can
save time and the more we can round out workforce
benefits. We know we can't always pay more, but
if we can have better benefits and other things,
that's what we want to do. Absolutely. Well,
that's a great place to leave it. I really appreciate
being here. I love, you know, the. the philosophy
that NACO and you have about, you know, really
that we're better together, you know, and that's
what we try to do here at WSAC. So thank you
for all your advocacy work and all your efforts
to improve county government. I think it's appreciated
by our members and I encourage everyone to get
engaged because there's more than enough opportunities
for you to. jump in and help out. Yeah. And just
I'll end too. We didn't really get a chance to
talk about it, but Wasiak, you and your counties
were really also instrumental in us launching
this National Center for Public Lands Counties.
Yeah. Help those counties really build the research,
the data to help with advocacy and storytelling
of when you're a county that has this huge landowner
called the federal government within your boundaries,
it adds a lot of complications. It also adds
some opportunity if done right. And we really
want to help those counties as well. It's really
in the fabric of NACO. Yeah, absolutely. And
if you're particularly interested in public lands
issues, I encourage you to check out the Western
Interstate Region, WIR, which is, you know, it
deals with all things that are of interest to
Western states. But they've really taken a deep
dive into the public lands issues and led the
charge on. on that initiative. So great way to
get engaged. All right. Well, thanks again, Matt.
Thank you. Look forward to talking to you in
the future. Thank you. Thanks for tuning in to
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