Disappearing money in fiscal research

When the fiscal note on the GOP-backed bill (HB 2) to pit North Carolina against the federal health care reform came out last month, it neglected to mention that the bill would cost $65 million a year.

The fiscal note, which legislators generally count on to be unbiased takes on what pending legislation could cost or save the state, omitted references to an estimated $65 million in tax revenue that the state expects to be collecting once health care reform goes into effect in 2014. If North Carolina is successful in stopping the individual mandate, which the bill in the state Legislature aims to do, that money would not materialize.

The $65 million in extra revenue appeared in an earlier fiscal memorandum for HB 2, available here, but didn’t make it to the fiscal note now up on the General Assembly’s Website.

The N.C. Department of Insurance provided information about the expected revenue to fiscal researchers compiling data on the bill’s potential cost. The state collects a 1.9 percent existing tax on health insurance policies and would amount to about $65 million a year, based on 880,000 people without insurance expected to sign up once the federal law goes into effect.

So why did the fiscal research staff leave that out? Marilyn Chism, the fiscal researcher director, did not immediately return a phone call seeking comment Friday afternoon. But a source speaking on background said that the fiscal research department, in consultation with people at the General Assembly, made a decision to only concentrate on the litigation costs the bill would have if the state Attorney General joined 26 other states in opposing the national health care plan.

Meanwhile, HB 2 is headed to the N.C Senate where the GOP-majority there is expected to pass it quickly. Then, it will land on Gov. Bev Perdue’s desk, where she’ll have to decide whether to sign or veto the bill.