RIPEC Looks at the Budget.
Sometimes the familiar is comforting, except when it is the same drumbeat of looming deficits in our state budget. A recently released RIPEC report, indicates that the state will run $118 million over budget in Medicaid. While Medicaid is paid with state and federal dollars, it's unfortunate that Ken Block wasn't elected Governor since his platform (and his business) targeted fraud, waste and abuse in the Medicaid system. And that number is important because more than one third of that is due to RI's decision to expand Medicaid. Let's hope that Governor Raimondo has met with Block to develop a game plan for addressing Medicaid.
As we have explained in the past, while that expansion was fully funded by the federal government for a time, that time is nearing an end. Remember that our state tax dollars will be used to subsidize this as the federal subsidies will be phased down to 90% beginning in 2017. RIPEC is right to note in its report that budget decisions must 'balance the implications of previous policy decisions with fiscal sustainability'. In other words, as we interpret it, the General Assembly should consider undoing the expansion of Medicaid or find ways to pay for it, perhaps by passing legislation to identify fraud, waste and abuse.
RI's HealthCare Exchange Falls Short.
According to a RI Center for Freedom and Prosperity Report , the original estimate for private enrollment through the exchange was 127,000. Now into its second year, Healthsource RI's private enrollment is at 28,000, nowhere near the original projection of 127,000.
And what is the expected annual cost of maintaining that exchange? Reportedly, around $15 million. So, we paid for a website that provided advertising for expanded Medicaid. It would have been cheaper to put a big billboard on the highway that reminded people they should check to see the new Medicaid eligibility requirements.
A Parting Shot?
A big reason why state agencies over spent seemed to be a surprise. Remember last year when former Governor Chafee provided raises for public union workers and they weren't in the budget? The way the General Assembly paid for them was to cross their fingers and tell these agencies to find it in their own budget. We pointed out last year that was not an effective planning tool and RI is now seeing that is not an effective budgeting tool. But the year has not yet ended. The remedy has been to tell the departments to only spend as necessary.
It is very apparent to those watching the RI employment numbers that the stats are not good. The RIPEC report states that RI has only recovered a little more than half of the jobs it lost since the great recession. In the same period, Massachusetts has nearly doubled the number of jobs from just prior to the recession. That relative performance is abysmal and provides the foundation for where RI is economically. The 2015 General Assembly and the Governor have a lot on their plate this session. We can only hope that this is the year we do more than 'move the needle' with economically sound pieces of legislation and a budget that focuses on reducing the cost of government.
Will the GA Tackle the Tough Issues?
The RIPEC report noted that the childcare subsidies were over budget because of recently legislated changes that provided extended coverage. Already in the 2015 legislative session, a bill to increase the amount of childcare subsidies has been introduced. The current cost of $50 million would again increase should this legislation pass. Perhaps this is one piece of the fallout from last session's approval to allow SEIU to organize private daycare workers? The negotiations of that contract are yet to be seen or heard from but those union dues will be subsidized one way or another.
We would expect to see the Medicaid fraud and abuse legislation reintroduced and passed this session. It passed in the House but not in the Senate last session. And, although the EBT program is funded with federal dollars, legislation to combat fraud in this area would reduce the corruption of our welfare system and the perceived attitude that handouts in RI are easy to come by.
The RIPEC report concluded that a more data-driven, coordinated and focused approach to economic development, as theoretically provided by recent changes in the EDC/Commerce Corp restructuring, would help RI lay the foundation for improvements in our economy. The one thing this report did not mention was the abomination of an "economic plan" that was adopted a couple of months ago by the State Division of Planning, known as RhodeMap RI. That plan, unless dismantled by the General Assembly this session, will start RI's economy down a disastrous path.
We have seen some legislation in the Senate that would allow certain towns to opt out of RhodeMap RI. The House Republican Caucus released a Press Release saying they would be providing legislation to address the land use and zoning issues in the plan.
RhodeMap RI needs to be completely dismantled. Rhode Islanders deserve a real economic development plan, one that won't be shelved, but rather one in which the vision is to create an inviting business landscape.
Can the GA Tackle the High Cost of Energy?
Legislation has been introduced this year, by Representative Pat Morgan, to form a commission to look at the high cost of energy. This is timely, given that National Grid requested a 24% rate increase this year. Unfortunately, the General Assembly passed significant green energy legislation in the 2014 session which increases the cost of our utility bills and that needs to be revisited as well. Instead, there is a hearing this week to continue adding mandates for more green energy (see below). (Let's hope it gets snowed out)!
Faith in Our Government
You may have recently heard about the Emergency 911 charges on your phone bill that aren't going to pay for the cost of Emergency 911. Don't you think that if the state is charging you for 911 services then that's where the money should be going? Reportedly, only about one-third of it is paying costs associated with 911 services. Does this make you lose faith in your government? Will we see legislation that provides a refund of two thirds of that money back to us?
At least the Senate has introduced a bill to create a commission to investigate the failure of the public loan guarantee program. Thank you to Senators Kettle, Morgan, Gee, Cote and O'Neill. Will the pursuit of justice die in the 2015 legislative session or will the General Assembly and the Speaker of the House recognize that corruption plays a big role in the economy, especially in an economy that just can't seem to get out of its own way?
An Unjust Law
Unfortunately, some believe it makes sense to provide a drivers' license for those who are here illegally. Legislation has already been introduced in the Senate by Ciccone, Nesselbush, Crowley, DaPonte and Lombardi. Let them know how you feel about this issue, along with Governor Raimondo, as she has indicated her support for this illegal action. Email each of them ASAP.
LEGISLATIVE HEARINGS 1/27/15 - 1/29/15
TUE, JAN 27 Chairman Kennedy
Room 203, Rise (4:30 pm)
H 5079 Renewable Energy - mandates even more renewable energy in years beyond the original 2019, to 2035, digging us deeper into the hole.
Sponsors: Ruggiero, Handy, Hearn, Shekarchi, Ackerman
WED, JAN 28
House Labor Chairman Sherkarchi
Room 205, 3:30 pm
H 5074 Increase minimum wage for the 4th year in a row, to $10.10
Sponsors: Bennett, McNamara, Lima, Hull, McLaughlin