Rainy-Day Fund Balances Vary Widely Across States

Wyoming has the largest estimated fiscal year 2019 rainy-day fund balance as a percentage of total state expenditures, at 109 percent, according to the National Association of State Budget Officers’ Spring 2019 Fiscal Survey of States. California has the largest FY 2019 rainy-day fund balance in terms of total dollars, at $17.8 billion, which is expected to make up about 12.4 percent of the state’s total expenditures for the year. However, three states - Illinois, Kansas and New Jersey - have no rainy-day funds at all.

KS Eying Healthcare Cost Controls

A special committee in Kansas is looking into ways to control the rising cost of healthcare in the state. This month the members of the House and Senate Special Committee on Financial Institutions and Insurance got a crash course on healthcare cost control measures other states have taken from Colleen Becker, a health policy specialist for the National Conference of State Legislatures.

 

Among the things Becker told the committee:

-   Louisiana, Maine and Minnesota recently prohibited prescription copays that were higher than the cost of the drugs associated with them

-   Utah has begun offering incentives to state workers for traveling to Mexico to purchase cheaper medications

-   Nevada imposed a limit on the price of diabetes drugs

-   Oklahoma linked performance standards to a group of drugs that could decrease hospitalizations.

 

“NCSL regularly tracks prescription drugs,” said Becker. “In 2019 alone, we had over 890 bills filed across all 50 states and D.C. With those kinds of numbers, it’s easy to see that the momentum is growing around states related to prescription drug pricing.”

 

One of the Kansas committee members, Rep. Elizabeth Bishop (D), said the state should require more transparency on the part of pharmacy benefits managers who negotiate drug prices with pharmaceutical companies.

 

“It is difficult to tell what is affecting price if you can’t see what the middleman is taking,” she said.

 

Another committee member, Sen. Rick Billinger (R), suggested the state needed to do something about health providers’ malpractice insurance premiums. The state’s Supreme Court struck down a cap on damages for noneconomic injuries in personal lawsuits in June.

 

“We have to look at everything when we look at price,” he said.

 

Robert St. Peter, president of the Kansas Health Institute, a nonprofit organization based in Topeka, told the committee that the state’s growing healthcare costs were due to a combination of factors, including the state’s aging population, rising drug prices, the prevalence of chronic diseases like obesity and concentration of the insurance industry, with Blue Cross and Blue Shield of Kansas covering 41 percent of insured residents statewide and three quarters of the market in Topeka and Manhattan.

 

“Look at Manhattan – 74 percent of the market by a single carrier. The next highest carrier is at 9 percent,” said St. Peter. “That gives you some idea of what the concentration of insurance market looks like in Kansas. That’s very important.”

 

St. Peter said the state could obtain more control over healthcare costs by expanding telemedicine, reducing unnecessary emergency room visits and implementing “reference pricing” -setting maximum amounts for drugs, tests and procedures - for the State Employee Health Plan.

 

He also cautioned legislators against shifting the burden of healthcare costs without lowering them.

 

“You’re pretty good at doing things that sometimes just shift who’s paying for something, but it doesn’t really change what’s being paid overall,” he said. “And that’s the hard conversation to have. Slowing that overall rate of spending is more difficult.” (TOPEKA CAPITAL-JOURNAL)

Most States Charge Jail Inmates Room and Board

Brown County, Wisconsin is one of at least 23 counties in the state that charge jail inmates room and board for the time that they’re incarcerated. But Wisconsin isn’t alone. At least 40 states charge such “pay-to-stay” fees, although the practice varies from state to state, with some charging all inmates and others charging only jail inmates, prison inmates or inmates who work.

 

Brown County’s pay-to-stay fees were upheld in 2013 by the U.S. District Court for the Eastern District of Wisconsin.

 

“There is no evidence that Brown County was motivated by a desire to punish pretrial detainees when it collected lock-up fees from them,” wrote Judge Lynn Adelman. “The policy appeared to be rationally related to the county’s legitimate interest in ‘effective management of the detention facility.’”

 

However, the U.S. Supreme Court unanimously ruled last year that such fees could be so high that they violated the protection against excessive fines granted by the U.S. Constitution’s Eighth Amendment.

 

As Alexes Harris, a professor of sociology at the University of Washington, put it, “If I could create a perfect system to maintain inequality, create inequality and sustain it over time, this is the system.”

 

“The process perfectly labels, stigmatizes, financially burdens and imposes further legal consequences to poor people.... Somebody who is poor has that debt for life, and it tracks them for life. It’s a long-term duration of punishment for poor people.” (WISCONSIN PUBLIC RADIO)

Budgets in Brief - September 23 2019

TN PROPOSES SWITCH TO MEDICAID BLOCK GRANT FUNDING

TENNESSEE unveiled a plan last week that would fund its Medicaid program through a federal block grant, limiting how much is spent on the program instead of paying for whomever enrolls, which is the way the program has operated ever since it was created in 1965. Gov. Bill Lee (R) said the change would reduce the cost of Medicaid services without lowering their quality, while opponents say it will lead to more eligibility restrictions or service cuts. (STATELINE)

 

PUSH FOR VAPING TAX LEGISLATION IN AR

With concern rising about the safety of vaping, ARKANSAS Senate President Jim Hendren (R) released draft legislation last week that would subject e-cigarette products to the same taxes and regulations as currently exist in the state for tobacco products and urged Gov. Asa Hutchinson (R) to call a special session to consider the proposal. Hendren proposed an e-cigarette tax measure (SB 571) in March that died after being amended in the House. (ASSOCIATED PRESS, ARKANSAS TIMES [LITTLE ROCK], LEXISNEXIS STATE NET)

 

CO REINSURANCE PROGRAM COULD COST MORE THAN EXPECTED

COLORADO’s new reinsurance program - one of the signature achievements of Gov. Jared Polis (D) and the state’s Democrat-led General Assembly this year, expected to significantly reduce health insurance premiums for many residents next year - could cost up to $50 million, or 20 percent, more than estimated, according to early projections from insurers. Although insurers and not the state would have to pay for any cost overrun, that additional expense would likely be passed on to consumers in the form of rate increases. (COLORADO SUN [DENVER])

 

-- Compiled by KOREY CLARK

Trump Administration Revokes CA’s Authority Over Auto Emissions

For decades, California has been able to adopt auto emission regulations that are tougher than those approved by the federal government, thanks to a federal waiver allowing the state to set its own auto emission standards and other states to follow those regulations instead of those set by the Environmental Protection Agency, which 13 states opted to do. But that arrangement could end under a new regulation announced by the Trump administration last week affirming that the National Highway Transportation Safety Board and EPA have the authority to set a single fuel economy standard for the nation.

 

Federal officials acknowledged that the “One National Program Rule” would increase fuel consumption and greenhouse gas emissions. But they argued that California had used its waiver to effectively set national policy on auto emissions, making newer, safer cars unaffordable for many people.

 

“We will not let political agendas in a single state be forced upon the other 49, and we will always put safety first,” said Transportation Secretary Elaine Chao.

 

President Trump tweeted that the rule change would also be good for the economy.

 

“Many more cars will be produced under the new and uniform standard, meaning significantly more JOBS, JOBS, JOBS!” he wrote.

 

The administration’s action is consistent with its ongoing effort to relax fuel efficiency standards put in place during the Obama administration, requiring new vehicles to average 50 miles per gallon by 2025. The Trump administration wants to freeze the fuel efficiency target at 37 miles per gallon after 2020.

 

But the new rule also comes two months after California spurned the administration’s fuel efficiency plan by reaching a voluntary agreement with Ford, BMW, Honda and Volkswagen to follow the state’s standards even if looser federal standards are adopted. That deal has also prompted an antitrust investigation by the Justice Department.

 

California Gov. Gavin Newsom (D) accused President Trump of having a “political vendetta” against the state and vowed to fight the rule change.

 

“It’s a move that could have devastating consequences for our kids’ health and the air we breathe if California were to roll over,” he said in a statement. “But we will not - we will fight this latest attempt and defend our clean car standards.”

 

The Auto Alliance, a trade group representing automakers that build 70 percent of the cars and light trucks sold in the United States, issued a statement after the announcement of the rule change saying it supported “one national program as the best path to preserve good auto jobs, keep new vehicles affordable for more Americans and avoid a marketplace with different standards.”

 

But U.S. Sen. Tom Carper of Delaware, the ranking Democrat on the Senate Environment and Public Works Committee, said that based on “numerous meetings and conversations” he’d had with automakers, he didn’t think any of them wanted the outcome of a protracted legal fight over the issue.

 

“In fact, it’s the exact outcome they sought to avoid,” he said. (NBC NEWS, ABC NEWS)