RALEIGH - Government generally moves at a slow pace. Viewpoints must be heard, debates held and consensus built. All this takes time. Then when agreement is reached, it's usually for change around the edges. Government is not known for large, sweeping alterations in programs and policies. Our system is built to be measured and deliberative.

But every once in a while government surprises us and passes legislation that is sweeping in its impact. A good example is the changes the General Assembly made in 2007 to Medicaid financing.

This legislation will result in big boosts to the public budgets of those counties that have been struggling the most with economic challenges this decade. A unique feature is that well-off counties won't be harmed in the process.

Medicaid is the joint federal-state program that helps pay the medical bills of low-income households. It has been one of the fastest growing of government programs, increasing at a rate two to three times more than other public spending. The federal and state governments share in Medicaid costs. But what has been different for North Carolina (and a handful of other states) was a requirement that county governments also pay some of the bill for their Medicaid recipients.

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AN ARGUMENT CAN BE MADE THAT SUCH A SYSTEM gives counties a financial incentive to improve their local economy and move households off the Medicaid rolls. Yet the reality is that economic development is a long process, and making counties share in the Medicaid safety net made the cost of that net highest for counties least able to afford it.

Indeed, county-funded Medicaid costs, as a share of the total county budget, have been five to six times higher in North Carolina counties with the highest poverty rates compared with counties with the lowest poverty rates.

So after much debate and discussion, in 2007 North Carolina took the step of relieving counties of their part of financing Medicaid costs. The relief will come in stages, with full implementation occurring in 2009. To help defray the added costs of the Medicaid takeover, the state will also transfer a half cent of the local sales tax to state coffers.

If left here, this exchange would have helped lower-income counties with relatively large Medicaid costs at the expense of many higher-income counties which would have lost more in sales tax revenue than they would have gained in reduced Medicaid expenses. That is, the policy would have created "winner" and "loser" counties.

But -- to their credit -- state leaders didn't stop here. They also made a modest change in the distribution formula for the sales tax that favors higher-income counties. But the clincher was this. The state guaranteed -- with state funds -- that every county will "win" from the Medicaid/sales tax swap by at least $500,000 annually.

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THE STATE'S TAKEOVER OF LOCAL MEDICAID COSTS IS BIG. It's one of the most far-reaching changes in state and local financing in decades. Even after accounting for the loss in local sales tax revenue, some counties will see their local public resources increase by almost 15 percent when the plan is fully in effect.

These funds can be used for education, public infrastructure or be returned to local taxpayers. My analysis shows that counties with the highest poverty rates will see the greatest gains. So the plan helps economically challenged counties the most.

Of course, this change in Medicaid financing doesn't address the issue of the program's continuing fast growth and its command over an increasing share of public resources. However, the issues of the program's structure are best addressed by the federal and state governments. And now that North Carolina's state government is solely responsible for the state's share of the program's cost, perhaps there will be renewed interest in studying possible reforms.

The change in Medicaid's financing is a major accomplishment. It helps low-income counties without hurting higher-income counties. It frees up county resources for other pressing local needs. Even though it may come in under the public radar, government can create big change that makes a difference.

(Michael L. Walden is a William Neal Reynolds distinguished professor at N.C. State University. His new book, "North Carolina in the Connected Age," will be published in September.)