The $90 million hospital Medicaid deficit still exists as 2009 dawns. But, nearly everyone (the governor included) now acknowledges that the cigarette tax should and will be raised. You’d guess the hospitals are happy, huh? New tax money will be available to defer the $90 million they’d otherwise have to pay themselves. Surely Mississippi hospitals can finally breathe a sigh of relief?
Negatory. The worm has turned. With the national economy (and the state’s general fund revenues) decidedly in the tank, the House Democrat leadership has other ideas for the new tax revenue. According to HB 1383, passed by the Appropriations Committee Wednesday and scheduled for a vote before the full House on Thursday, $68 million of the projected new tobacco tax revenue would be used not to defray the hospitals’ Medicaid share, as legislators were told was so desperately needed in 2008, but rather to restore a 3.49 percent cut in this year’s MAEP funding made necessary because of the economic downturn. (Most other state programs were cut as much as 5%). The hospitals necessarily are left to fend for themselves — they’ll either provide the $90 million state match on their own, or the unmatched Fed Medicaid funding will disappear, thereby deepening their plight. In any event, the hospitals’ erstwhile House friends (“Don’t tax sick people!”) evidently have forsaken the cause.
In fairness, there are two big variables at play here. First of all, there is the optimistic assumption among House Democrats that the new Obama administration is going to bail out the states, and that as a result, massive new “stimulus” monies will be flowing into state coffers, and that those expected millions can be used in part for Medicaid. That’s a lot of assuming, but maybe they’re right. Certainly this (a huge bailout for the states) has been proposed in Washington. I suppose the Federal taxpayer will have to weigh in at some point on the fiscal wisdom of using limitless Federal dollars (they print bills when it suits them, you know, and simply charge it to your grandchildren) to rescue state governments from any responsibility to exercise budgetary discipline. Regardless, however, this expected bailout is still very much in the planning stage; Congress has not approved it, and we don’t have any of the money yet.
Furthermore, it also is a fact that the “new” tobacco monies are not in hand yet either. The scheme embodied within HB 1383 baldly assumes that the Senate will join the House in adopting a total new $1.00 cigarette tax, and that Gov. Barbour will sign this tax hike into law. Fat chance on both counts. In reality, most observers at the Capitol expect no more than roughly one-half (50 to 60 cents) of the House $1.00 cig tax proposal to ever actually become law. That would mean, of course, that HB 1383 grossly over-estimates the money available to restore MAEP funding.
The bottom line is that HB 1383 is much more about posturing certain House members as loyal “pro-education” advocates than doing anything realistic or productive with respect to the budget. This essentially meaningless “feel good” bill likely will pass the House, and then die in the Senate, as it should, but with plenty of partisan chest-thumping all around in the meantime.
Rep Greg Snowden
Clarion Ledger
1/21/9
Magnolia Tribune
