NC Budget and Tax Center

Legislative leaders need to invest in longterm needs of NC, not one-time redistribution

Redistributing the tax dollars of the state’s wealthiest taxpayers (66 percent of all capital gains income in the state are held by taxpayers in the top 1 percent) to all taxpayers may sound appealing to Senator Berger, but our families, communities, and economy would be a lot better off if they invest those dollars in schools that remain underfunded, people who can’t get the health care they need, and our water that is literally poisonous.

Senator Berger’s redistribution proposal won’t permanently fix the state’s upside-down tax code, either, given the one-time nature of these dollars.

With the announcement that the state may have a larger than projected over-collection of revenue that can help to meet the backlog of unmet needs in classrooms and communities, it is time for legislative leaders to get to work on finalizing a budget that better reflects the priorities of leadership looking to move our state ahead and account for how they will spend those dollars in the next year.

Economists from both the General Assembly’s Fiscal Research Division and the Office of State Budget and Management found this spring that the $896 million more in revenue over projections was due primarily to larger than expected increases in capital gains income.  Wage and salary income performed at projected growth levels. States across the country have experienced similar unexpected increases in their revenue, largely from the same source, although also from corporate profits.  These increases are also happening in states that have not recently cut taxes and in states that recently have increased tax rates like Minnesota.

In the face of growing income inequality where the top 1 percent have incomes 20 times that of the bottom 99 percent, these additional dollars should be driven into breaking down barriers to more equitable outcomes in our state.

Instead of concocting ever more complicated schemes to constrain opportunity in our communities, Senator Berger and Speaker Moore should work with members on both sides of the aisle to put forward a budget that deploys these dollars for the public good. Read more

Commentary, NC Budget and Tax Center

NC has nation’s third highest total of excessive deaths from failure to expand Medicaid

In case you missed it, there are some new and incredibly sobering numbers out that ought to be interfering with the sleep patterns of Senate President Pro Tem Phil Berger and House Speaker Tim Moore. As Alexandra Sirota of the N.C. Budget & Tax Center recently reported:

New research released by the National Bureau of Economic Research provides estimates of the life and death impact of Medicaid expansion.  While many researchers have pointed to the improvements to health outcomes, management of health conditions, and quality of life that comes with access to affordable health care for those in need, this data provides new and compelling evidence that the decision to expand Medicaid has a profound affect on the life expectancy of adults living in the coverage gap.

By linking death records and data on program participation and health outcomes across all states, the authors of this new report estimate the impact of Medicaid expansion on the mortality rate of near-elderly adults.  Their findings point to a 9.3 percent decline in annual mortality for this age group in those states with Medicaid expansion.  The primary reason for the improvement in life expectancy is disease management while under the care of Medicaid.

In addition to this nationwide comparison, the researchers provide estimates of the number of excessive deaths in North Carolina due to the failure of Medicaid expansion.  Three hundred and fifty people in North Carolina died because of the lack of affordable health care coverage.  This represents the third highest number of excessive deaths for a state that hasn’t expanded Medicaid behind Texas and Florida.

NC Budget and Tax Center

The N.C. budget stalemate, explained in GIFs

Earlier this summer, NC lawmakers passed a $24 billion conference budget that missed a number of opportunities to provide basic services and improve the lives of everyday North Carolinians. Within 24 hours, Governor Cooper vetoed the budget, calling it a “failure of common sense and common decency.”

On July 1, the Fiscal Year began and we didn’t have a budget.

No budget??!! While you might be confused about how we’re still running as a state, it’s because there’s a statute that keeps public programs funded at prior year levels.

This means that enrollment growth for schools and health care isn’t funded, pay raises and increases in retirement contributions for teachers and state employers aren’t provided, and emerging needs aren’t addressed.

A couple weeks after the start of the fiscal year, Governor Cooper released a compromise proposal that keeps nearly every major component of the conference budget — except it also includes a clean Medicaid expansion and eliminates tax cuts to corporations, using that revenue to invest in teachers and schools.

Read more

NC Budget and Tax Center

Federal court strikes down Medicaid work requirements — this time in New Hampshire

On Monday, a federal judge overturned approval given by the U.S. Secretary of Health and Human Services that would have allowed New Hampshire to impose work-reporting requirements on Medicaid recipients. Such requirements are at odds with the objective of Medicaid to provide medical assistance, the judge stated, citing the experience in Arkansas where more than 16,000 individuals lost their Medicaid coverage.

“In short, we have all seen this movie before,” U.S. District Judge Boasberg stated in his decision. The same judge struck down similar waivers in Arkansas and Kentucky earlier this year.

Proponents of work-reporting requirements claim that they improve enrollee health and incentivize community engagement. However, the reality is that many low-income adults who need health coverage in order to enter the workforce lose coverage as a result of the requirements, thereby making it harder to manage their health needs.

Adults who meet exemption criteria are unaware that they do, or are unable to jump over the hurdles necessary to prove that they are exempt. Others don’t meet the narrow criteria for disability that would grant them an exemption. A recent study (summarized here) from Arkansas found that many of the individuals who lose coverage are actually meeting the requirements but are unable to report their hours for various reasons.

Our findings estimate that 88,000 North Carolinians could lose coverage due to work reporting requirements.

In addition to the harm they impose on Medicaid recipients, work reporting requirements are costly and complicated to administer. Modifying current systems to determine eligibility and exemption, creating and implementing ways for recipients to report work hours, and disseminating information about the new requirements as a condition of Medicaid coverage are just a few of the costly steps to administer and that require hiring additional staff.

The legal precedent supported by this latest federal court ruling should discourage states from following a similar path to Medicaid expansion with a waiver, given that they’ve been deemed illegal in three states so far. Instead, states should seek to increase access to Medicaid coverage through “clean” expansion and not by erecting barriers that create harm and unnecessary cost.

Suzy Khachaturyan is a Policy Analyst at the Budget and Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

Trump administration rejects Utah’s bid for more federal funds for “partial” Medicaid expansion

Late last week, White House officials stated that they would not approve enhanced federal funding for Utah’s partial Medicaid expansion, according to news reports, raising questions about the viability of the plan given the significant cost to the state.

This follows an earlier decision from the Centers for Medicare and Medicaid Services (CMS) that gave approval for Utah’s waiver request to expand Medicaid only up to 100 percent of the Federal Poverty Level (FPL). Medicaid expansion under the Affordable Care Act permits states to expand up to 138 percent FPL in exchange for the federal government paying 90 percent of the cost of services for those who gain new coverage, up from the current 68 percent match rate in Utah.

It turns out that Medicaid expansion up to the 138 percent level is not only best able to maximize the health and economic benefits to states, it also is the most (and only) fiscally responsible option for state policymakers.

Utah is the first state to submit a waiver for partial expansion without already having expanded Medicaid and, given the absence of additional federal funds to do so, it would seem fiscally unwise that a state would take up this option moving forward.

Wisconsin is the only state to extend coverage up to 100 percent FPL, absent Medicaid expansion, and does not receive the enhanced federal match. In fact, Utah’s funding rejection follows in the footsteps of other states, who both sought to lower their income eligibility requirements for Medicaid.

Partial Medicaid expansion is one of several mechanisms by which states have tried to restrict eligibility and coverage while expecting the federal government to provide additional financial support.

It not only compromises the integrity of Affordable Care Act, which created the option for states to expand Medicaid in the first place, but blocks the possibilities for greater health from being realized through state action.

Suzy Khachaturyan is a Policy Analyst at the Budget and Tax Center, a project of the North Carolina Justice Center.