Two tax proposals under consideration, possibly initiatives to the ballot

Posted by AzBlueMeanie:

There are two tax proposals under consideration, possibly as a citizens intiatives headed for the 2012 ballot.

The first is a plan floated earlier this year by the Arizona Hospital Association to avoid the draconian budget cuts to AHCCCS care and enrollment enacted by our Tea-Publican governor and legislature (that are now being litigated in court). The Arizona Capitol Times (subscription required) reports Hospitals planning second push for bed-tax proposal:

Arizona’s hospitals will renew their campaign for a bed-tax proposal to draw down federal money, which they say would salvage coverage for thousands of residents who are frozen out of the state’s Medicaid program.

The state’s hospital association plans to start lobbying lawmakers later this year, hoping to persuade them to green-light a funding mechanism that other states have used to get federal dollars.

Lawmakers snubbed the proposal last session.

Tea-Publican legislators objected out of ideological knee-jerk reaction to the "T" word. Two-thirds of them have signed the "no tax" pledge to their lord and master, Grover Norquist. Poor people on AHCCCS should die "and decrease the surplus population," as Ebeneezer Scrooge advised.

The idea is to assess hospitals with a fee, and use the money – expected to be about $465 million – to replace some of the state funding for the Arizona Health Care Cost Containment System that was cut in the last budget go-round.

The revenue would be used to mostly cover low-income adults who were frozen out of the state Medicaid system starting in July. That population, known as “childless adults,” became eligible for state Medicaid coverage in 2000 when voters approved Proposition 204.

A lawsuit is pending on the constitutionality of those cuts.

Special health care assessments as a funding mechanism to draw down federal money is common among states, but Arizona legislators were unimpressed last session.

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Under the governor’s plan, AHCCCS enrollment of low-income adults without children — their population is currently more than 220,000 — is frozen.

As an alternative to fund that population, the hospitals are proposing a roughly $280 per day assessment on themselves for inpatient stays. That’s expected to raise $360 million in fiscal 2012.

Additionally, the tax on the premium revenues of AHCCCS-contracted health plans would increase to 4 percent from the current 2 percent. That would generate $100 million in the same year.

Finally, nursing homes would also be assessed a fee, generating $5 million.

The funding stream would be dedicated to Medicaid and used to draw down what is typically a 2-to-1 match from the federal government.

Under this plan, hospitals, health plans and nursing facilities will be paid back from the matching funds. The idea is to offset the cost of the assessment and prevent it from being passed on to patients.

The health care assessment would end in December 2013.

Also under the proposal, hospitals and providers are seeking to halt a 5 percent rate cut for providers that lawmakers approved for fiscal 2012, which is estimated to save the state $95 million.

In addition to the hospital assessment, the proposal also includes enrolment fees for childless adults and copayment schemes, including increasing co-pays to discourage nonemergency visits to emergency rooms.

The Affordable Care Act will expand Medicaid coverage to all individuals who earn up to 133 percent of the federal poverty level in 2014. (That’s about $29,300 for a family of four). Individuals who are currently frozen out of AHCCCS will be added back to its rolls, and AHCCCS will receive new enrollees because the Affordable Care Act also requires everybody to buy health insurance. The hospital group sees its proposal as a way to bridge the gap between now and 2014.

The other tax proposal is for education. Education groups are putting their differences aside to work on a ballot measure that would raise taxes for K-12 education and put into place reforms that could fundamentally change the way schools operate in Arizona. Looming fiscal crisis forces disparate education groups to work on new tax – Arizona Capitol Times (subscription required):

A coalition of public education advocates, charter school proponents and other groups has worked for about two months on a wide-ranging ballot measure that already has members of the business community pledging their tentative support for the proposal, but with the caveat that the coalition must unify around one proposal.

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The November 2012 election is the last chance for the groups to get voter approval for a new funding source before the 2013 expiration of Proposition 100, a three-year, one-cent sales tax hike that offset budget cuts with hundreds of millions in K-12 education funding.

“That’s one of the things that’s keeping people at the table. You’re looking at when Prop. 100 goes away, that’s roughly a billion dollars that disappears,” said consultant Jaime Molera, who served as superintendent of public instruction in 2001 and 2002 and is a member of the state Board of Education.

The other thing that’s keeping the disparate entities together is the business community. Some groups, such as Greater Phoenix Leadership, are already working with the coalition, while others, such as the Arizona Chamber of Commerce and Industry, are tentatively in favor of the effort, but won’t pledge any kind of support until they see the final product.

But for all of the business groups, one thing is certain — they’re only going to throw their support behind one ballot measure, and they don’t want any competing propositions blurring the ballot.

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In addition to that impetus, Carlson said schools will also have to implement new common core standards around the same time Prop. 100 expires, and they’ll need money to do it. A pilot program for the new standards begins in 2012, and schools must implement the full program in 2013.

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James Zaharis, vice president for education at the Greater Phoenix Leadership, which is tentatively supporting the effort, said any proposal must include performance pay for teachers, while Keegan said the different groups, including the Arizona Education Association and Arizona Education Network, have agreed to performance-based measures. Zaharis said the stakeholders, who have met at least half a dozen times in the past two months, have made a lot of progress in the last 10 days or so.

AEA President Andrew Morrill echoed that sentiment, saying the loose coalition that began with Keegan and Arizona Education Network President Ann-Eve Pedersen is gaining traction.

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Keegan agreed that there’s reason for optimism. She said the group has set a deadline of Oct. 1 to have some kind of proposal in writing, though an actual ballot measure will take a bit longer. Past that, she said, it would likely be too late to do anything and the coalition will abandon its efforts. “I don’t think that’s going to happen. We’re 80-20 this is going to go.

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Outside of the general agreement on performance-based reform for schools, Keegan wouldn’t divulge many details of the discussions. There are still a lot of questions about exactly what performance-based reforms might be included, whether they’ll address the issue of how state funding might be equalized to give charter schools a bigger share — one of Keegan’s stated goals at the June 8 meeting.

No one is even sure what kind of tax hike would be on the ballot. “It would be one of the three — sales, income, property,” Zaharis said.

The discussions have included a broad cross-section of education advocates and organizations in the state, including the AEA, Arizona Education Network, Stand for Children, Teach for America, Arizona School Boards Association, the Arizona Department of Education and the Scottsdale Parent Council.

We'll have to wait and see what emerges. Stay tuned.