Kaiser Daily Health Policy Report Examines State Budget Developments
Summaries of recent news about state budgets in Arizona, Connecticut, Louisiana, New Jersey, North Carolina and Rhode Island appear below.
- Arizona: A group of Arizona health-related professional associations has filed a lawsuit alleging that a provision of the 2008-2009 state budget that would send 100% of the fees collected by the groups to the state's general fund represents illegal taxation, the Arizona Republic reports. Groups such as the Arizona Board of Examiners of Nursing Care Institution Administrators and Assisted Living Facility Managers and the Arizona Medical Board collect fees on the professionals they regulate. Previously, 10% of the fees were given to the state general fund and 90% were used to fund the boards' operations. State lawmakers last year approved a measure allowing the state to collect 100% of the fees as one of several steps taken to balance the budget. Plaintiff attorney Roger Morris said the eight boards taking part in the suit face severe shortfalls in funding as a result of the change. He added that taking the fees amounts to illegal taxation because the money had been earmarked for regulatory fees but used instead for general purposes. State law requires that any legislative action that increases state revenue must be counterbalanced by cuts in other revenue sources or enacted with a two-thirds vote by the Legislature. Morris said, "We don't think the proper procedures were followed," adding, "We think a two-thirds vote is needed because this is an additional tax" (Pitzl, Arizona Republic, 4/9).
- Connecticut: Gov. Jodi Rell (R) on Tuesday asked the state Legislature to approve $67.3 million in additional budget cuts that would affect dental care and prescription drug programs, among other areas, the Hartford Courant reports. The proposal includes reducing dental services for adult Medicaid beneficiaries to cover only emergency cases, as well as increasing the annual enrollment fee for the ConnPACE prescription drug subsidy program from $30 to $45. Both plans originally were proposed by Rell for the next two fiscal years but are now fast-tracked so that they would take effect May 1. The proposals are intended to help close a state budget gap that Rell's office estimates at $667 million and the state comptroller estimates at more than $1 billion. State House Speaker Christopher Donovan (D) and state Rep. John Geragosian (D), who chairs the House committee responsible for drafting the budget, said lawmakers are not looking to make further cuts (Keating, Hartford Courant, 4/8).
- Louisiana: Gov. Bobby Jindal (R) on Wednesday expressed support for proposed measures (SB1, SB2) that would amend the state's constitution to allow for greater flexibility in cutting funds from the state budget, in order to deter cuts to health care and higher education, the Baton Rouge Advocate reports. The state is expecting a $1.3 billion reduction in revenues for fiscal year 2009-2010, and budget problems could be exacerbated in two years when federal stimulus funding expires. More than half of the state's $9.7 billion general fund is nondiscretionary and cannot be cut, while a large portion of the $4.4 billion that is considered discretionary is for health care and higher education, and therefore most likely to be cut in case of a deficit. Jindal said he supports the bills, which would increase from 5% to 10% the maximum amount of each statutory dedication that can be cut when there is a budget deficit, and to eliminate a state law limiting to 5% statutory dedications that can be cut over two years (Blum, Baton Rouge Advocate, 4/9).
- New Jersey: The budget proposal put forward by Gov. Jon Corzine (D) would limit adult enrollment in the state's FamilyCare program but would seek to expand coverage of low-income children, the Philadelphia Inquirer reports. Corzine is seeking to save $9.7 million by lowering the maximum income for parents applying for new enrollment in FamilyCare from 200% of the federal poverty level to 150%. The program added 45,000 adults last year after the income cap was increased from 133% of the poverty level to 200%, and the program's costs are expected to increase from $339 million last year to $595 million this year if the cap is maintained. State Sen. Joseph Vitale (D), who sponsored the FamilyCare expansion, has said he will fight Corzine's proposal. The governor's budget plan also would eliminate a $19 monthly premium for children in families with incomes between 151% and 200% of the poverty level. The plan also includes new copayments for drugs purchased by Medicaid beneficiaries and HIV/AIDS drugs, and a provision seeking to purchase drugs more efficiently (Tamari, Philadelphia Inquirer, 4/6).
- North Carolina: The state Senate on Wednesday voted 32-16 to grant initial approval of a two-year budget plan that includes a freeze or reduction in Medicaid reimbursements, the AP/Virginian-Pilot reports. After a final Senate vote Thursday, the budget proposal would go to the House, which will draw up its own plan. The two chambers would then aim to craft a compromise that can be passed this summer (Robertson, AP/Virginian-Pilot, 4/9).
- Rhode Island: Gov. Don Carcieri (R) on Tuesday said he would allow the current year's budget revision plan, passed last week by the General Assembly, to become law this week without his signature, the Providence Journal reports. The revision would increase the state cigarette tax by $1, effective Thursday. Also included in the bill is a reduction of payments to hospitals and nursing homes over the next three months, as well as a new premium tax on not-for-profit health care centers (Peoples, Providence Journal, 4/8).