One interesting thing about the “Death Panel” hyperboliad was that neither side focused on the reality that Government death panels already exist. I know, because I sit on one.
Medicaid is poverty-level health insurance administered by the states. States and the federal government both fund Medicaid. Because we balance our budgets, there is only so much state government money to go around. State money must meet the needs of public education, higher education, transportation, public safety, prisons, all state programs, etc., etc. – and Medicaid.
When I entered the Legislature in 2001, Medicaid commanded 9% of the state budget: a very large amount. Now, however, even prior to the ObamaCare ramp up, Medicaid commands 20% of Utah’s budget. That is money that will not go to public education, higher education, etc. The growth in Medicaid is out of control. It threatens everything else Utah does.
So, the Legislature has to get a better handle on Medicaid spending. That, of course, means hard choices. And, I mean really hard choices. By funding one thing, and not another thing, some people will suffer. In some circumstances, people will even die. If you want your heart to absolutely break, sit through meetings of the Health & Human Services Sub-Appropriations Committee and listen to people’s stories. If we don’t better fund mental health, if we don’t fund AZT, if we don’t fund the waiting list, people will suffer and people will die.
So, we fund a lot, meaning that we have less funds for education, etc. But, we don’t fund everything, meaning that people suffer and die.
We could take more money from our citizens, but we already take a lot. And, our indicators suggest that higher taxes chase away productive businesses and citizens, and, therefore, end up hurting the economy and hurting government tax revenues that rise or fall based on the economy. So, we make hard decisions and try to balance. Last week, Doug Wright provided an excellent example of why that task is so difficult.
Doug Wright probably is Utah’s most-listened-to talk radio personality. He’s good. I like listening to, and being on, his show – because he typically works to address the real complexities of issues, rather than ignore the complexities, treat them like something simple, and beat a simplistic message into the ground. That’s why I was surprised by his reaction to preliminary discussions regarding Utah’s Medicaid budget.
Joe Pyrah reported last Wednesday that elective c-sections and epidurals would be examined (actually, “cut” was the reporting) as part of the Legislature’s budget considerations. The next day, Doug Wright painted that as the dumbest idea ever and as legislators being unfeeling jerks to even consider it. Even though Doug’s job is to be informed and to inform, he indicated that he does not appreciate the complexities in play; to his listeners, therefore, it’s just another story about legislators being idiots.
Many people think that Utah should just pay for everything; legislators should stop being a bunch of heartless conservative jerks. Well, that’s not an option. We have to balance.
Any Medicaid item looked at individually will appear absolutely necessary. Each item will have advocates who need the program. And, I’m not talking about fluffy stuff. People who can’t see want glasses. People with rotting teeth want dental care. People who are severely handicapped want some help, and their families would like a little break. And, of course, laboring mothers want to have elective c-sections and epidurals. Are any of those things wrong? Absolutely not. If we’re hurting, we want the hurting to stop. If we can’t pay for it, we want Government to pay for it. But, are any of those important items immune from a prioritization process? Absolutely not.
Utah’s revenues just might stay level this year. However, growth of $200,000,000 is needed to fund the enrollment growth in 2 programs alone (public education and Medicaid). In other words, we’ll need to find $200 million in cuts elsewhere, raise taxes $200 million, or find some combination of the two, just to keep those 2 programs level. (A majority of Utahns do not want their taxes raised. Trust me on that one.).
So, we have some tough decisions to make. I doubt the media will choke up on its bat when isolated threads of the budget are pulled out of the broader context of the overall budget. But, I thought it might be good to state somewhere that every item can’t be a holy grail – if we’re actually going to balance the budget.
And, one other thing, when we make these decisions, do we think about the individuals who will be impacted? Yes. We think about them a great deal, and we don’t make these decisions lightly.
UPDATE (08/24/10): Man, oh, man! Check out the commentary to Kristen Stewart’s article on this issue. (A thorough article, I should add). Senator Dan Liljenquist might just get poked with sharp sticks when he leaves his house this morning.
But here’s the beauty of a functional government; with all the input, Dan will lead the way in helping Utah get this figured out. I didn’t know him before the plane crash. But, having survived it, having lost loved ones, and having worked to get himself back on two feet, he’s got amazing perspective, patience, and goodwill. This commentary is much like that of one year ago, when he announced that he would fix Utah’s flagging retirement system.
He received tremendous amounts of data, commentary, and criticism. He met with everyone. He learned all he could. He valued people’s input, and he adjusted and re-adjusted. And, ultimately, he figured it out, and people strongly support the changes. Now, state retirement benefits are secure, taxpayers are protected, and Utah is the absolute talk of the Nation when it comes to state retirement systems. In a representative democracy, tough discussions are essential.
The truly bad thing about all this, though, is the timing. I don’t know if it could be any worse. The Trib commentariat is quite eager for Dan to have an unnatural encounter with a watermelon. And, wouldn’t you know it, the Green River melons are just hitting their peak. Dan, here’s hoping that Parker West isn’t allowed to add any items to this agenda.
Obama Dollars and Utah Schools
Last night, I read that the Provo School District is considering using one-time federal money to expand kindergarten from half-day to full-day. I asked on Twitter whether alleged ponziist Rick Koerber was in charge of finances for the district, raising the issue that it is irresponsible to expand on-going programs with one-time money. SL Trib reporter Robert Gehrke retweeted my item, and correctly pointed out that the State of Utah is using one-time money for on-going programs.
I replied that a huge difference exists between using one-time money to fund on-going programs and using one-time money to start new programs. I’ll elaborate.
“One-time money” means a revenue source that won’t be repeated (e.g., death tax revenues from a huge estate, federal stimulus monies (um, well . . .)).
“On-going expenses” means costs that will continue (e.g., salaries for long-term employees).
Right now, in an $11 billion budget, Utah has $313 million in on-going costs with no source of on-going revenue. We hate funding things that way. Utah is riding out the recession better than most states, because, in part, we have not done that. We pay for on-going costs with on-going revenue streams. We use one-time money for one-time expenses (e.g., roads, buildings).
So, if that’s been our practice, why does Utah now have a structural imbalance (i.e., more on-going expenses than on-going revenues)? Answer: though we have made significant cuts to get our costs in-line with revenues, we have existing programs that we do not feel we should cut further at this time (e.g., public education).
We hope that the economy will turn around and that revenues pick up, so that those costs can be covered. But, hope obviously is a poor budgeting strategy. So, should the economy not rebound, we’ve identified actual money sources to fund the expenses (e.g., the rainy-day fund).
The hole for public education funding is about $50 million. When you factor in the cost of simple growth in the student population, the amount of money we have to find – to stay level – jumps even further.
So, with that background, what should districts do with the $101 million that Utah might receive from the federal government. It seems pretty clear that they should do what they have to do to stay level – use the money to retain people, add back training days, employ teacher aids on a 1-year contract. It seems pretty clear that they shouldn’t expand programs – that would take money that then wouldn’t go the items in the previous sentence. If revenues don’t come back next year – which they likely won’t – the new kindergarten teachers would have to be fired (unless more money was taken from other teachers, training days, etc.).
If a household is financially strained and has made real cutbacks, it shouldn’t use unexpected one-time money to buy JetSkis. It should use the money to stay level. The State has been working hard to keep important programs level (by significantly cutting some programs and by expanding almost no programs). It shouldn’t shock anyone that we think the same course of action would be prudent for school districts.