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JUNE 16, 2017
STILL WAITING FOR THE BIG PICTURE
We are now
four and a half months into this Session with less than a month to go and we
still don’t know a lot of the details of the majority party’s plan. It
does appear, however, that things are beginning to start happening.
Because all tax measures must start in the House, there are two big issues that
need to be resolved there first. The gross receipts tax, or the son of
measure 97, will be coming out of the joint tax committee on Monday and could
be on the House floor for a vote by Tuesday. I have been told it will be
defeated there and that should take care of that issue for this Session.
The other big money issue is the provider tax for the Medicaid program (HB
2391) and that bill passed on the House floor yesterday and is now headed for
the Senate.
We knew
dealing with Medicaid was going to be one of the biggest issues this
Session. At this point it would do no good to rehash the debate over the
“expansion population” even though we knew it was going to cost the state more
money in the long run, because it is our reality. The issue simply
becomes a matter of how we will fill the budget hole. A workgroup was
created to deal with this issue and there were very definite solutions
available. Unfortunately, the group came up with the wrong
solution. The hospitals were very willing to step up to the plate to fill
the hole inside of the Medicaid system by increasing the percentage of the
“assessment” that has been in place for many years. This is where things
went south from my perspective. The workgroup insisted on going another
direction and creating two new taxes. The first was on hospitals and the
second was on insurance premiums. This is where the problems arise.
It takes a super-majority vote to create a tax, but once it has been created it
can be increased by a simple majority vote. With the full understanding
of the fact the Democrat majority will continue, we are giving them the
opportunity to increase these new taxes anytime they wish. Because we
have been hearing from the Speaker and the Governor all Session about how we
need “new revenue,” one can easily assume we will see increases in the future.
One aspect
of the budget process we are falling short of is the aspect of cost containment.
I have mentioned before the fact that the cost of government in Oregon has
risen by 50% over the last ten years and we are on a trajectory that is
completely unsustainable. We have suggested we need to come up with one
billion dollars in efficiencies in the general fund, but at this point all we
have seen is four hundred million dollars all from “other funds.” We
believe it should be a requirement to prove to the people we are making
efficient use of the money they are already sending us before we ask for
more. Unfortunately, the majority party seems set on the continued
expansion of government for political reasons. For example, the Oregon
Health Authority, which is a very poorly run agency with nearly 4,500 employees
is asking for nearly 200 more employees. This is an agency carved out of
the Department of Human Services over a decade ago and charged primarily with
dealing with Medicaid and coordinated care organizations.'’ They have now
involved themselves in the business of most other state agencies which adds
greatly to the expense and overly complicates a lot of the work. It
clearly goes beyond OHA as to the vast amount of duplication we have in state
agencies. This is the first place we should be looking for efficiencies,
but because it would include the elimination of government jobs, some will not
let that happen.
One more
point on the provider tax. It is probably certain Congress will be
reforming Medicaid in some form in 2018. At that point all this budget
voodoo we are creating might disappear. At that point all we will be left
with are the new taxes we have created. This clearly serves the majority
party’s agenda. It is very disappointing when politics triumphs over good
policy.
Sincerely,
Senator Jeff
Kruse
email: Sen.JeffKruse@oregonlegislature.gov I phone: 503-986-1701
address: 900 Court St NE, S-205, Salem, OR, 97301
website: http://www.oregonlegislature.gov/kruse
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