Prescription for Wyoming’s budget woes: Medicaid Expansion

(Opinion) — I hate to be a doom-and-gloom kind of guy, but when I consider the next month at the Wyoming Legislature’s budget session, I don’t see any reason for optimism.

Wyoming’s projected revenue shortfall continues to grow with falling energy prices. Yet lawmakers refuse to accept the hundreds of millions in federal dollars that would come with Medicaid expansion — dollars that could improve both the state’s economy and the lives of our low-income residents.

Last month the Consensus Estimating Revenue Group revised its forecast downward for the next three fiscal years. A projected shortfall of $159 million for the current fiscal year has grown by $32 million since October, and a $419 million revenue shortfall for 2017-18 has increased by $46.4 million.

Windfalls that previously helped improve Wyoming’s revenue picture aren’t available this year. Record capital gains from the state’s investments have generated hundreds of millions of dollars during the past three years, but they’ve dried up. In December, the State Treasurer’s office reported it has identified only $16.8 million in capital gains from the Permanent Mineral Trust Fund (PMTF) and $7.4 million from the state agency pool of the General Fund. Coal lease bonus funds poured $736 million into the Wyoming School Capital Construction Account in 2013-14. The state’s current estimate for the 2019-20 biennium is only $26 million.

Wyoming can’t even catch a break when unexpected additional funds do materialize. The state’s congressional delegation successfully lobbied for a provision in the federal highway bill that will provide $242 million to Wyoming in Abandoned Mine Land funds this year, and an additional $350 million during the next decade. The catch is that the U.S. Department of Interior places restrictions on how states can use the money, so any plan developed by the Legislature will have to be approved by the federal government.

Everyone in state government expects energy prices to rebound at some point, but precisely when is impossible to determine. Last October, when Wyoming’s fiscal picture looked better than it does now, CREG experts said it may be six years before energy prices rebound. Could it be seven or eight? Absolutely. Rep. Steve Harshman (R-Casper), co-chairman of the Joint Appropriations Committee, recently said the state should be prepared for the downturn to last another decade.

There are some temporary fixes available to help the state get through the next three years, but they will likely be difficult for the Republican legislative leadership to push through. Withdrawals from the $1.8 billion Legislative Stabilization Reserve Account, better known as the “Rainy Day” fund, have been unthinkable to the GOP in recent sessions.

Now it appears raiding the account might be the only way for Wyoming to avoid even less palatable revenue generators such as a state income tax or state sales tax increase. Republican Gov. Matt Mead has proposed taking $450 million out of the LSRA this year, and replacing it with money that is now being automatically deposited in the PMTF.

The governor would also like for his proposed borrow-and-repay method to be codified with a state statute, a move likely to be opposed by the JAC. The committee wants to establish rules for how much goes into the LSRA and what triggers the ability of the state to withdraw it, but would rather not be handcuffed by a law. If the state’s revenue picture suddenly changes rules could be more easily revised.

The JAC has made some changes for this session designed to make the budget process easier for legislators to follow. Instead of putting all spending in a single bill, there will be one bill that covers general operating expenses of state government and others funding school capital construction, the School Foundation Program and state facilities.

This new approach may make the budget process easier to understand, but the volume of budget bills might also slow down the Legislature’s work. It only has 20 days to finalize the budget and decide if it wants to take-up any non-budget bills. Any item without direct budget implications needs at least two-thirds support to be introduced.

The JAC is typically successful at ramrodding its joint budget agenda through both houses, but this is not a typical budget year. Many proposed cuts to services and programs may be uncomfortably deep for some legislators.

Legislators who have stubbornly refused to pass Medicaid expansion for the past three years could make their budget workload easier by changing their minds, but it appears to be a lost cause. Privately some Democrats say they think opponents are coming around on the issue, but a few gained votes won’t be enough to approve Medicaid expansion.

Expanding Medicaid to an estimated 20,000 working poor should be the easiest decision lawmakers ever make, but several factors have kept Wyoming in the minority of states that keep saying no. One is the unwillingness of many Republican legislators to approve any law that would make the Affordable Care Act — “Obamacare” — more successful.

There is also a lot of misinformation spread by lawmakers and the public about how the federal law works and which Wyoming residents would benefit. Expansion is designed to provide health insurance to low-income, childless adult workers who don’t currently meet Medicaid income guidelines, but also don’t earn enough to qualify for private insurance premium subsidies under the Affordable Care Act.

Last year Senate President Phil Nicholas (R-Laramie), who voted in favor of the rejected Medicaid SHARE plan proposed by Mead and the Wyoming Department of Health, noted that the two-thirds vote of support required for Medicaid expansion to even be considered by the full Senate this session would require at least nine senators to switch their votes. Nicholas said he hasn’t seen a change of heart on the issue from any of the 19 senators who opposed the bill.

Nicholas said it is the moderate members of the Senate who appear resolute in their opposition to Medicaid expansion. What these senators want to see, Nicholas explained, is a work requirement. Using a popular legislative phrase that seems to bounce from committee to committee on all issues concerning the poor, they insist new Medicaid recipients have “some skin in the game.”

Nicholas said some legislators are afraid many low-income people would quit their jobs if they could get the government to pay for their health insurance and obtain other welfare assistance.

That doesn’t make any sense to me. Not everyone is lazy or after a free ride. The majority of these 20,000 residents already work for a living. Many struggle to make ends meet by toiling at two or more minimum-wage jobs. Why would they quit because they now have health insurance? Is the lure of government programs like the Supplemental Nutrition Assistance Program (previously known as food stamps) really enough to keep the impoverished from trying to better their lives? What they really want is the opportunity to finally get healthy by having access to proper care.

In addition to the human element, legislators who are desperately trying to find ways to balance the budget should consider the $260 million in federal funds that would flow into the Wyoming’s economy during the next biennium if Medicaid were expanded. Why aren’t they swayed by the estimated $30 million the state would save each year through reductions in services for people are too sick to work? Why have lawmakers arrogantly ignored the pleas of a broad coalition of businesses, insurance companies, churches and nonprofit social service agencies who want Medicaid expanded? Would they rather simply make across-the-board cuts and go home?

Our state can continue punishing poor people by again rejecting Medicaid expansion, or it can help the poor acquire both health coverage and dignity with the millions of dollars we have already paid in federal taxes. Passing Medicaid expansion could reduce the need to make severe budget cuts, end the state’s hiring freeze, put more people to work, and ease the burden on hospitals currently footing the bill for uncompensated care.

Does that sound like a hard decision to you?

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