Budget and Taxes

CA Healthcare Tax Blocked by Trump Administration: The Trump administration has denied California’s request to impose a tax on managed care organizations that administer the state’s Medicaid plans.

The decision won’t immediately impact the state’s budget because it wasn’t planning to start receiving revenue from the tax this fiscal year or the next one, which begins July 1. But the state would have $1.2 billion less revenue than planned in the fiscal year that starts July 1, 2021 and $1.9 billion less the following year.

Losing out on the tax revenue likely wouldn’t significantly impact the state’s $100 billion Medicaid program, the largest in the nation. But Anthony Wright, executive director of the consumer healthcare advocacy group Health Access, said without that additional revenue a number of benefits would have to be eliminated. He also said he was surprised by the Trump administration’s decision because it had given the go-ahead for similar taxes in Michigan and Ohio.

“There should be no reason why California should not be able to get a revenue stream for our Medicaid program that other states are getting,” he said.

The Centers for Medicare and Medicaid Services said it denied California’s tax because it would only apply to managed care organizations that receive Medicaid payments and not to those that don’t receive such payments, which would be a violation federal rules.

The decision won’t do anything to ease tensions between the state and the Trump administration, which have been battling over a number of issues, including vehicle emission standards.

Still, California Department of Finance spokesman H.D. Palmer said the state would “continue its ongoing discussions with federal Medicaid officials on this issue.”

“Consistent with the federal government’s prior approvals of similar financing waivers, we believe and expect that we can reach an agreement that allows this type of financing to continue,” he said. (ASSOCIATED PRESS, TIME)

Budgets in Brief:

MN Lawmakers Pushing for Affordable Housing Program: DFL lawmakers in Minnesota are backing legislation that would establish a state rent subsidy program for low-income residents in an effort to reduce homelessness. But the proposal faces long odds because of its $1 billion-per-year price tag. (MINNEAPOLIS STAR-TRIBUNE)

GA Passes ‘Marketplace Facilitator’ Law: The first major bill passed by Georgia’s General Assembly in the 2020 session is HB 276, which will require “marketplace facilitators” whose apps or websites are used by others to sell goods or services to Minnesota residents collect and remit sales taxes to the state. The legislation, signed by Gov. Brian Kemp (D) last month, takes effect April 1. (ATLANTA JOURNAL-CONSTITUTION, LEXISNEXIS STATE NET)

IN to Spend $291M Tax Windfall on College Construction: Indiana Gov. Eric Holcomb (R) signed off last month on a plan to spend $291 million in unexpected tax revenue on college campus construction projects instead of paying for that construction with borrowing approved in the two-year state budget in April. The governor said the new plan will ensure the state “remains the fiscal envy of the nation by saving Hoosier taxpayers more than $135 million in borrowing costs.” (ASSOCIATED PRESS)

-- Compiled by KOREY CLARK

Politics and Leadership

IA’s Disastrous Democratic Caucus: By most accounts Iowa’s Democratic presidential caucuses last Monday were a complete disaster. Due to problems with a new app used to report caucus results and then to difficulties submitting those results by phone, by the end of election night 0 percent of the final tally was in. That denied the winner of the contest from being able to officially declare victory before heading to New Hampshire to campaign for the primary there on Feb. 11. Former South Bend, Indiana Mayor Pete Buttigieg, evidently confident in his caucus performance, still took a stab at a victory speech a little after midnight eastern time.

“We don’t know all the results,” he told supporters. “But we know, by the time it’s all said and done, Iowa, you have shocked the nation, because by all indications, we are going on to New Hampshire victorious.”

By Tuesday afternoon the state party had released only incomplete results showing Buttigieg with a slight lead over U.S. Sen. Bernie Sanders (D-Vermont), prompting former Iowa Democratic Party Chairman Derek Eadon to remark, “A systemwide disaster.”

By late Thursday night a second candidate, Sanders. had declared victory. With 100 percent of the precincts having reported, Sanders led Buttigieg in the popular vote, 45,826 to 43,195, although Buttigieg was still a hair ahead in state delegate equivalents - the criteria most media outlets use to determine winners of the state’s caucuses - 26.2 to 26.1. The Associated Press tweeted that it was unable to declare a winner in the current contest because of the tight margin between the two candidates and “irregularities in this year’s process.”

Democratic National Committee Chairman Tom Perez, meanwhile, called for a recanvassing of the caucuses.

“Enough is enough,” he tweeted. “In light of the problems that have emerged in the implementation of the delegate selection plan and in order to assure public confidence in the results, I am calling on the Iowa Democratic Party to immediately begin a recanvass.”

In response, Iowa Democratic Party Chairman Troy Price issued a somewhat defiant statement saying, “Should any presidential campaign in compliance with the Iowa Delegate Selection Plan request a recanvass, the IDP is prepared.” (DES MOINES REGISTER, VOX, NEW YORK TIMES, POLITICO,

NM to Weigh Presidential Primary Shift: This year New Mexico will hold one of the last presidential primary elections in the country, on June 2, along with Montana, New Jersey and South Dakota. But under a bill (HB 350) introduced last week, New Mexico’s 2024 presidential primary would be among the nation’s first, held in mid-January.

“Why can’t we be the bellwether instead of Iowa?” said the bill’s sponsor, Rep. Javier Martínez (D).

Iowa’s caucuses have been the first presidential nominating contests for decades. And the state has actually passed a law mandating that those caucuses be held at least eight days before any other nominating contest. So even if HB 350 is enacted, New Mexico’s primary wouldn’t be first-in-the-nation, unless the Democratic National Committee stripped Iowa of that status, which isn’t inconceivable after last week’s debacle there.

But Martinez said moving up the state’s presidential primary (the primary date for other offices wouldn’t change) could bring more political campaigns and tax dollars to the state. And the state’s diverse population, nearly half of which is Hispanic or Latino, would give minority candidates a better shot at winning their respective parties’ nomination. (ALBUQUERQUE JOURNAL, LEXISNEXIS STATE NET)

Politics in Brief

NJ Senate Considering Extending Terms of Supreme Court Justices: New Jersey Senate Judiciary Chairman Nick Scutari (D) and Sen. Kip Batemen (R) have introduced a constitutional amendment (SCR 47) and a bill (SB 1064) that would allow the state’s Supreme Court justices and Superior Court judges, with Senate approval, to serve for two-year increments after the current mandatory retirement age of 70. The legislation, if approved, would deny Gov. Phil Murphy (D) the opportunity of nominating someone to the Supreme Court when Justice Walter Timpone turns 70 in November. (POLITICO, LEXISNEXIS STATE NET)

Republican TX PAC Raising Cash to Fend Off Dems in November: A Republican super PAC called Engage Texas has raised $11.8 million since forming last June with the aim of registering hundreds of thousands of new Texas voters before the November election. Democrats are hoping to claim a majority in the state’s House, as well as flip seven of its U.S. House seats and defeat Republican U.S. Sen. John Cornyn. (TEXAS TRIBUNE [AUSTIN])

OR Dems Looking to End Lawmaker Walkouts: Oregon Senate Majority Leader Ginny Burdick (D) is expected to introduce a proposed constitutional amendment this session seeking voter approval for the Legislature to convene with a simple majority of lawmakers present instead of the two-thirds majority currently required. Last year Republicans staged walkouts to deny Democrats the quorum they needed to approve bills dealing with global warming, gun control and vaccinations. (ASSOCIATED PRESS)

-- Compiled by KOREY CLARK


Govs Warn New Fed Rule Might Mean Big Medicaid Cuts: Governors from both parties expressed concern last week that a new fiscal responsibility rule being implemented by the Trump administration could lead to major cuts to state Medicaid programs.

The proposed rule by the Centers for Medicare and Medicaid Services would tighten federal oversight over the financing strategies states use to help pay for their share of the $600 billion joint state-federal program. The rule would also impact some payments to hospitals that treat low-income patients. The proposal has also drawn significant criticism from hospitals, nursing homes, insurers, doctors, and advocates for the poor.

“States may be unable to adequately fund their Medicaid programs, which could lead to unintended consequences that would negatively impact Medicaid beneficiaries across the country,” wrote Govs. Kate Brown (D) of Oregon and Charlie Baker (R)of Massachusetts in a statement released through the National Governors Association.

CMS chief Seema Verma said she understands the need for states to utilize financing plans, but referred to some of those plans as “shady” and accused them of driving up Medicaid costs. She said the proposed changes would increase “transparency, integrity and clarity” in the program.

But a study of the latest proposal conducted by Manatt Health consultants for the American Hospital Association said it would cut as much as $49 billion a year in total Medicaid spending, a reduction of 8 percent of the program’s funds. A CMS spokesperson disputed those estimates, saying the study was not through enough. (ASSOCIATED PRESS, NBC NEWS, NATIONAL GOVERNORS ASSSOCIATION) 

Cuomo Signs Limo Safety Reform Package: Inspired by deadly crashes in 2015 and 2018, New York Gov. Andrew Cuomo (D) signed a 10-bill package of reforms aimed at improving limousine safety in the Empire State. The reforms include requiring limos to have seat belts, allowing the state to impound unsafe vehicles and a requirement that limo drivers carrying nine or more passengers have a passenger-endorsed commercial driver's license.

The 2015 crash in which a limo was hit while making a U-turn took four lives; the 2018 crash killed 20, including two pedestrians.Lawmakers are expected to pass an amendment to the seat belt measure that would shift responsibility for ensuring minors use the safety devices to the parent or guardian of a passenger between the ages of eight and 16 who declines to buckle up. (ALBANY TIMES-UNION, NBC NEWS)

Governors in Brief:

Lee Wants to Extend TN Postpartum Care: Citing a spate of deaths of Volunteer State women within a year of giving birth, Tennessee Gov. Bill Lee (R) announced a three-year pilot program to extend postpartum health coverage for Medicaid patients from two months to a full year. The governor said his plan would also cover dental care for women during and after pregnancy. (TENNESSEAN [NASHVILLE])

Gov Warns LA Cities of Cyber Attacks: Saying that a ransomware attack “is a question of when, not if,” Louisiana Gov. John Bel Edwards (D) urged local governments to step up their defenses against hackers. At least eight school districts across the Pelican State have experienced ransomware attacks since last November. (KNOE NEWS [MONROE])

Lamont Urges CT Weed Legalization: Citing evolving weed laws in neighboring states and decrying a “patchwork of cannabis and vaping laws” he says “are impossible to enforce,” Connecticut Gov. Ned Lamont (D) called on lawmakers to make the Constitution State the latest to legalize recreational marijuana use. Lamont said he would work with other governors to develop a “regional approach” for cannabis legalization and regulation. (WALL STREET JOURNAL, CONNECTICUT MIRROR [HARTFORD])

Ivey to Order AL Gambling Study: Alabama Gov. Kay Ivey (R) said she plans to issue an executive order in the coming weeks to create a study group to help determine whether to allow a lottery or casinos in the Heart of Dixie. The group would assess how much revenue the state might realistically glean from allowing gambling. (ASSOCIATED PRESS)

Kemp Wants Less Testing in GA Schools: Declaring that the state’s current K-12 testing requirements are “making students physically sick because they’re worried they will not do well,” Georgia Gov. Brian Kemp (R) announced legislation to cut back on the number of tests Peach State students have to take. Kemp joined other lawmakers of both parties in introducing SB 367, a bill that would eliminate five such high-stakes tests and shorten the required Georgia Milestone test in order to allow teachers more instruction time. The measure is now in the Senate Education and Youth Committee. (GEORGIA RECORDER, LEXIS NEXIS STATE NET)

Newsom Wants to End CA School Fitness Testing: Saying the state’s current K-12 physical fitness training is leading to body shaming, discrimination and bullying, California Gov. Gavin Newsom (D) proposed a three-year moratorium to work out an alternative. The testing uses six criteria - aerobic ability, body mass, flexibility and a combination of abdominal, trunk and upper-body strength – to assess a child’s overall physical fitness. (LEXISNEXIS STATE NET)

-- Compiled by RICH EHISEN

Hot Issues

Business: The VERMONT Legislature fails to override Gov. Phil Scott’s (R) veto of HB 107, legislation that would have established a statewide paid family leave program. Scott rejected the bill because it would have been funded by a $29 million mandatory payroll tax (VERMONT DIGGER). The KENTUCKY House gives final approval to HB 236, a bill that would allow the state to expand the number of qualified laboratories authorized to test the state’s industrial hemp crop for THC, a psychoactive component found in hemp and other types of cannabis. It moves to Gov. Andy Beshear (D) for consideration (WFIE [EVANSVILLE]). The CALIFORNIA Senate approves SB 378, which would create a way to make large investor-owned electric companies in the Golden State pay customers for losses they incur during power shut-offs. It moves to the Assembly (SAN FRACNISCO CHRONICLE).

Education: The INDIANA Senate approves SB 263, which would require all Hoosier State teachers who wish to carry guns in school to undergo a mandatory 40-hour training program, followed by 16 hours of additional training thereafter. It moves to the House (ASSOCIATED PRESS). Also in INDIANA, the House and Senate approve SB 2, which would hold schools harmless from the consequences of poor performances on ILEARN, the state’s new standardized test. It moves to Gov. Eric Holcomb (R), who is expected to sign it into law (INDIANAPOLIS STAR). WISCONSIN Gov. Tony Evers (D) signs AB 528, which will create a peer to peer suicide prevention program that trains students to recognize and respond appropriately when their peers are going through a mental health crisis (WISCONSIN GOVERNOR’S OFFICE).

Environment: The VIRGINIA House approves a bill that would bar future oil and gas drilling off the Old Dominion coastline. It moves to the Senate (REUTERS).

Health & Science: The MICHIGAN House gives final approval to HB 4126 and HB 4127, which together would require marijuana dispensaries to have labels warning pregnant women and breastfeeding mothers about the health risks of smoking marijuana to their fetuses and infants. The bills, which would also require shops to make an informational pamphlet that includes safety information related to use by minors and the state’s poison control hotline number available at every point of sale, moves to Gov. Gretchen Whitmer (D) for consideration (ASSOCIATED PRESS). WISCONSIN Gov. Tony Evers (D) signs AB 287, which among several things allows a physician and a physician assistant or nurse practitioner to make findings of incapacity for a health care power of attorney to become effective and for admission to a hospice (WISCONSIN GOVERNOR’S OFFICE).

Immigration: The ARIZONA House rejects HB 2084, which would have allowed landowners to sidestep state and local permitting requirements to build a border wall (ASSOCIATED PRESS).

Social Policy: PENNSYLVANIA Gov. Tom Wolf (D) signs SB 60, a bill that elevates human trafficking to a first-degree felony in the Keystone State and changes current statute to define a child as anyone under 18 years old, rather than 16 years old (WTAE [PITTSBURGH]).

Local Front: The GEORGIA Senate approves SB 139, which would place regulatory power over electric scooters with local governments. It moves to the House (ATLANTA JOURNAL-CONSTITUTION).

-- Compiled by RICH EHISEN

Once Around the Statehouse Lightly

There’s an Emoji for That: If you live in Vermont and are as sick as I am of people communicating via emoji, you might want to skip this. As NBC 5 in Burlington reports, a state lawmaker has introduced a bill that would allow motorists to place select emojis on their car license plates. If passed, motorists would choose from one of six as-yet-to-be-named emojis, which would not replace any of the plate’s numbers or letters used for identification. So to be clear, a police officer running a plate won’t have to utter: “123 Ida Xray Tango, Poop emoji.”

Going Incognito: At first blush, a bill introduced in Rhode Island by Rep. Anastasia P. Williams that would make lawmakers exempt from a law that restricts how much tinting can be applied to a car’s windows seems more than a bit self-important. But then when you consider how often those in the public eye feel the wrath of a ravenous, angry public fueled by radio and TV meatheads who have raised irresponsible screeching to an art form, maybe it’s not so silly after all. As reported by the Boston Globe, Williams’ bill would also apply to state judges, police officers and firefighters, and would allow them to apply darker tint to their personal vehicles. Just one question – if they leave office or the job, do they have to remove the darker stuff? 

Big Apple Bagel Brouhaha: Speaking of irrational wrath on elected officials, my friends in public office, please make sure you eat your bagels in the right way. Yes, as the New York Times reports, New York City Mayor Bill de Blasio recently took a ration of grief for daring to reveal he liked his bagels toasted. Oh, the shame! No sooner had hizzoner said it before people were ripping him a new one, asserting the 11th Commandment that thou shalt not toast a bagel. One city councilman even joined in, running a poll to answer the burning question of toasted or untoasted. Sadly, this is not de Blasio’s first food biff – he also took major grief a while back for daring to eat pizza with a knife and fork. Okay, okay, okay...that one is pretty lame.