Budget & Taxes--State Net October 10, 2011

MS JOBS PROGRAM COULD BE NATIONAL MODEL: President Obama is still trying to sell his jobs plan to America, but there's a program in Mississippi that is already creating jobs. And some analysts say it could be a model for the nation. 
 
The Subsidized Transitional Employment Program and Services, or STEPS, pays some of the cost of workers' salaries in the hope that employers will keep them on after the state money stops. Under the program, which was launched in December 2009 with federal stimulus money and ended in September 2010, companies that hired new workers who met poverty guidelines and were caring for at least one child under the age of 18, didn't have to pay any of those workers' wages in the first two months of employment. The subsidy then phased out over the next four months. 
 
State officials said more than half of the 3,200 people who got jobs through the program were still employed six months after the program ended. 
 
"We had 1,800 permanent jobs created," said Stan McMorris with the state Department of Employment Security, adding that each of those job holders was now "a taxpaying, wage-earning individual" that had been "lifted up to the point [where] they're being successful." 
 
Some small businesses with just a few employees, however, complained that the program involved too much paperwork and too many rules. 
 
"My problem is...the restrictions, really, that I see whenever they do these programs," said Greg Cronin, owner of Cascades Racquet Club in the suburbs of Jackson. "I'm probably more of the small company who would love to make a step forward, who watches other companies get the breaks [and] get these assistive programs but still not have something except an increase in property tax on me." 
 
Still, the program was so popular the state started a new but smaller version a few weeks ago, called STEPS 2, which provides a four-month subsidy. Multicraft International, an auto parts maker and supplier in Pelahatchie, is one company taking advantage of the new program to hire back workers after the economy forced it to downsize. 
 
"It just takes a bit of the sting out of the cost of hiring another person," said CEO Andrew Mallinson. "We're happy to do that when the business conditions allow, but this does stimulate us to perhaps take action earlier than we might otherwise." 
 
Funding for STEPS 2 runs out in December, but Obama's jobs bill includes a proposal that would provide states $5 billion for job training and subsidizing employment. (NATIONAL PUBLIC RADIO, MISSISSIPPI DEPARTMENT OF EMPLOYMENT SECURITY) 
 
VT STARTS WORK ON SINGLE-PAYER HEALTH CARE: Vermont has embarked on its pioneering effort to replace its current health care system, utilizing traditional insurance plans and fee-for-service reimbursements, with a new publicly-financed, single-payer system that pays providers a set fee to care for patients. 
 
Many of the details of the system, called Green Mountain Care, which was proposed by Gov. Peter Shumlin (D) and passed by the Democrat-controlled legislature in May - including the issue of how to pay for it - have yet to be worked out. But the governor has wasted no time in moving the state toward a single-payer system since taking office in January. 
 
Last month, he appointed a five-member panel, the Green Mountain Care board, which officially began working October 1st on plans to revamp the state's health care delivery and payment system, including setting reimbursement rates. 
 
"Every state in the nation faces a crisis in terms of health care costs rising faster than our ability to pay," said Anya Rader Wallack, who will chair the board. "What's unique about Vermont is that we have a governor who has said, 'I want to fix this problem,' and he's put us on a tight timeline for fixing it." 
 
No other state has attempted such a major overhaul of its health care system, and none of the federal health care reform bills debated by Congress provided for a single-payer system. But Vermont barred insurers from denying coverage due to preexisting medical conditions and limited rate variation nearly 20 years before the federal health care overhaul. The state also has one of the most generous Medicaid programs in the nation, as well as higher health care spending and a greater percentage of insured residents than many other states. 
 
Not everyone is happy about the state's decision to blaze a new trail on health care policy, however. Some business owners fear losing control over their employee health insurance and having to pay higher taxes. And some House Republicans have criticized the governor for putting off dealing with how to finance the plan until after the 2012 gubernatorial race. 
 
Meanwhile, David Himmelstein, a professor at the City University of New York's School of Public Health and a single-payer advocate, warned that private insurance plans could undermine the state's coverage the same way that Medicare Advantage plans have weakened Medicare, by inhibiting it from upgrading its coverage. 
 
"The only reason to buy private coverage when there is public coverage is if the public is not good," he said. "So it gives the insurance lobby a very strong motive to make the public insurance inadequate since that gins up business for them." (KAISER HEALTH NEWS) 
 
BUDGETS IN BRIEF: A FLORIDA judge ruled this month that the Legislature violated the state's Constitution by issuing the order to privatize prisons in 18 South Florida counties through the state budget and ordered the project to be stopped immediately. The state is considering whether to appeal Leon County Circuit Judge Jackie Fulford's decision (ST. PETERSBURG TIMES). • CALIFORNIA Gov. Jerry Brown (D) signed a bill last week authorizing the state to revoke the driver's licenses of egregious tax debtors who do not enter tax repayment plans with the state Franchise Tax Board or State Board of Equalization. AB 1424, sponsored by state Assemblyman Henry Perea (D), is an effort to recoup some of the estimated $6.5 billion in income and business taxes owed to the state (SACRAMENTO BEE). • PENNSYLVANIA Gov. Tom Corbett (R) announced a plan last week to impose fees for the first time on companies drilling for natural gas in the state. Under the proposal, drillers would pay up to $160,000 per well over the first 10 years of each well's production, generating an estimated $120 million to $200 million a year in revenue that would be split between the state and local governments (PROPUBLICA). • The first phase of NEW YORK's Medicaid overhaul has achieved almost $600 million in savings in its first six months, despite the addition of roughly 72,000 people to the program through August, according to a progress report released last week. The state's initial batch of 78 cost-cutting measures, which included shifting enrollees out of fee-for-service plans into managed care plans, were adopted in the state budget at the end of March (TIMES UNION [ALBANY]). - Compiled by KOREY CLARK

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