Legislature should maintain current Medicaid eligibility period

Extending eligibility to 12 months would cost taxpayers now, magnify budget problems later

AUSTIN – The Texas Legislature should resist calls to expand the Medicaid program by extending the continuous eligibility period from six months to 12, the Texas Public Policy Foundation said today.

“Medicaid was intended to provide health care to our poorest citizens,” said Andrea Whitman, health care policy analyst at the Texas Public Policy Foundation. “Having a six-month eligibility period ensures that those services are provided on a temporary basis to those citizens who are truly needy, and not as a long-term welfare program for those who are now financially able to pick up their own health care expenses.”

Whitman noted that the 12-month eligibility proposal – as contained in House Bill 1541 – would increase the number of Medicaid recipients by more than 250,000 and cost taxpayers almost $300 million in state funds over the next two years.

“Given recent forecasts of a sizable budget shortfall next session, the state needs to tighten its belt now and preserve as much cash as it can,” Whitman said. “Expanding Medicaid would be a double-whammy on next session’s budget – increasing the size of that budget hole while leaving us with fewer resources to fill it.”

“Medicaid costs every man, woman, and child in Texas more than $800 per year,” Whitman said. “Requiring recipients to apply every six months is not an unreasonable burden, given the value of the taxpayer-funded services they receive.”

Andrea Whitman is a health care policy analyst at the Texas Public Policy Foundation.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s website, www.TexasPolicy.com.

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Texas PolicyCast: A blueprint for an effective state budget

On Wednesday, the Texas Public Policy Foundation joined with several other research, business and taxpayer organizations to issue "Blueprint for an Effective State Budget," a statement intended to guide legislators through the difficult budget decisions they will have to make during the next few months. This week, we discuss the blueprint with one of its primary architects, The Honorable Talmadge Heflin, Director of the Center for Fiscal Policy at the Texas Public Policy Foundation and former Chairman of the Texas House Appropriations Committee.

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Statement on the Legislative Leadership’s Budget Instruction Letter

Statement by The Honorable Talmadge Heflin, Director of TPPF’s Center for Fiscal Policy

"We are pleased that Lt. Gov. David Dewhurst and Speaker Joe Straus are getting out in front of our state’s budget situation by asking agencies for targeted spending reductions. This is a time for state government to prioritize needs and cut some of the least important items, and the letter from Dewhurst and Straus seeks precisely that.

"Beginning the belt tightening process in the current fiscal year gives us a head start on getting our spending in line with available revenues in the next state budget. We should not leave ourselves in the position of relying on an influx of federal funds that might not come."

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s website, www.TexasPolicy.com.

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Statement on the Legislative Budget Board’s 2010-11 Budget Estimates

Statement by The Honorable Talmadge Heflin, Director of the Center for Fiscal Policy

"The first draft of the 2010-11 Texas state budget reinforces the message from Comptroller Susan Combs' revenue estimate last week. The Texas Legislature needs to get to work on pruning the next state budget back within the available revenue.

"The legislature needs to be mindful of the hard lesson it learned in 2001, when it spent the entire accumulated surplus of the 1990s at once and dug itself a $10 billion hole in 2003. The way for the legislature to avoid setting the same trap for itself is to continue to show fiscal restraint.”

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s website, www.TexasPolicy.com.

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Statement on Comptroller Susan Combs’ 2010-11 Revenue Estimate

Statement by The Honorable Talmadge Heflin, Director of the Center for Fiscal Policy

"The comptroller's revenue estimate makes clear what we have suspected for several months: while Texas has positioned itself better than just about any other state, we will not be immune to the effects from this national recession.

"The Texas Legislature needs to demonstrate leadership this year by pruning state spending now. Already, there are calls by some groups to expand entitlement programs and raise taxes, but Texas must not follow the examples of other states that have wrecked their economies by letting their budgets spiral out of control. Restraining our spending now will give us more options in the event that this national recession is prolonged.

"In 2001, the legislature convened with a $6 billion surplus and the knowledge that the state's economy was slowing. Instead of showing fiscal restraint, the legislature increased the state’s budget by 16 percent – an increase that absorbed the entire surplus. Even worse, much of the new spending went toward new programs that would become even more costly in the next budget cycle.

"Two years later, the legislature returned to a $10 billion budget deficit. The irresponsible budget adopted in 2001 forced the 2003 Texas Legislature to make deeper, across-the-board spending cuts than would have been the case had it started off with both a smaller budget hole and some cash reserves to help cover it."

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature's successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation's website, www.TexasPolicy.com.

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TPPF COMMENTARY: Compassion? Not in My Book

States like Texas have drawn criticism for not expanding government health care programs during strong economic times. But now that the national economy has slipped into recession, what has happened to the states that chose the other path? As former state representative and TPPF Visiting Research Fellow Arlene Wohlgemuth points out in this week's commentary, those states (notably California) are facing substantial budget deficits – and one of the first places they're looking for budget cuts is health care.

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Compassion? Not in My Book
By The Honorable Arlene Wohlgemuth

Bailout requests by numerous states have recently been a top news item, as everyone lines up behind the financial sector with their hands out. Rather than debate the wisdom of these bailouts, it is time to look at the states’ fiscal policies and see whom they hurt.

The recession of the early 2000s saw states scrambling to balance their budgets. Texas’ watershed year was 2003, with a $10 billion budget shortfall for the biennium, but we were not alone. California faced a whopping $38 billion shortfall that same year. The way the two states responded then, set the stage for what is happening today.

Texas reduced spending to cover the deficit that represented about 15 percent of its general revenue. The commitment was made, and kept, that the shortfall would not be resolved by increasing taxes.

Today, Texas has become the nation’s top job producer, hosts more Fortune 500 companies than any other state, and was cited by the Financial Times as the state best able to weather the financial storm. Although the economic downturn will cause short-term problems, especially in retirement system investments, the state will enter the next budget cycle in the black, just as it did in 2005 and 2007.

California, on the other hand, not only raised taxes as part of its deficit plan, but also borrowed $10.7 billion – about 15 percent of its general revenue. The result has been that California has lost both jobs and population. The current budget year has a $26 billion budget gap, representing 25.7 percent of general revenue. Its solution again is to borrow much of the money rather than significantly reducing spending. But this time, there is a steep price to pay.

California now has the lowest bond rating of any state and will pay for that through a high interest rate. Stateline.org reports that the state may be the first to “nose-dive into junk bond territory.” Instead of facing the recession from a position of fiscal strength, the state is incredibly weak.

Next will come the budget cuts, not only in California but in up to 36 other states. Not surprisingly, the two areas of the budget most often cited for targets of cuts are Medicaid and education.

California, in the name of compassion, has expanded its Medicaid rolls to the highest in the nation, with 29 percent of the population enrolled. Provider rate cuts are always first on the chopping block when things get tight, and that is what California has tried to do. Its 10 percent cut to providers in Medi-Cal, the state’s Medicaid plan, was temporarily halted by a federal judge in August, further complicating their budget woes.

California has expanded its Medicaid rolls in the good times, creating a dependency on the program, and now that the economy has gone south, health care for the poor will be the first area to take a hit. Expansion of government-paid health care programs inevitably increases the cost of health care for everyone and contracts the private market, meaning that everyone suffers. If the federal government decides to bail out states like California, it will reward them for poor fiscal management and punish Texas for being responsible.

The Kaiser Family Foundation estimates that for every 1 percent increase in the national unemployment rate, there are one million new enrollees in Medicaid and State Children’s Health Insurance Program (SCHIP), costing $3.43 billion in additional program spending.

At the very time when families will need the safety net of Medicaid and SCHIP the most, states that have not exercised fiscal responsibility, particularly those that have expanded their health care programs beyond sustainability, will not be in a position to help. That is not compassion.

Careless spending hurts those it purports to help.

Arlene Wohlgemuth is a Visiting Research Fellow at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.

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Statement on Comptroller Susan Combs’ Transparency Initiatives

Statement by The Honorable Talmadge Heflin, Director of the Center for Fiscal Policy

“Almost 53 percent of spending by Texas governments is done at the local level. Unfortunately, detailed information on that local spending is virtually inaccessible to taxpayers, who are the true local control.

“As our new report Texas Transparency: Then and Now published earlier this week shows, Texas’ experience with spending transparency undercuts all the excuses not to provide detailed expenditure information to the public. The technology is available, powerful, and inexpensive. The state’s savings were many times the startup costs, and hundreds of local school districts have seen value in embracing spending transparency.

“Texas has set the national standard in spending transparency thanks largely to Comptroller Susan Combs’ leadership. Today’s debut of the Texas Transparency Check-Up website affirms her commitment to open government.

“Texas already has open records and open meetings. The next step toward transparent and accountable government is open checkbooks, and the 81st Texas Legislature should make that the standard for local governments as it already is for the state. Taxpayers deserve to know how all levels of government are spending their money.”

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s primary website, www.TexasPolicy.com, or its government spending transparency website, www.TexasBudgetSource.com.

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Foundation launches TexasBudgetSource.com

AUSTIN – The Texas Public Policy Foundation debuted TexasBudgetSource.com today, a new website that will provide a comprehensive resource for information on state and local government budgets and spending.

“Texas has been a leader in the movement to increase transparency of state and local government spending,” said Foundation president Brooke Rollins. “Citizens become better informed voters when they can see how their tax dollars are being spent. Spending transparency also puts governments on notice that they can no longer get away with spending tax dollars in wasteful, duplicative, or self-serving ways.”

TexasBudgetSource.com features the following information:

* Original research and analysis on the Texas state budget produced by the Texas Public Policy Foundation;
* A “spend-o-meter” that keeps a running tab on how much Texas state government has spending during the current budget cycle;
* Links to the “Where The Money Goes Website” on state agency expenditures, as administered by Comptroller Susan Combs;
* Links to the online budget information (where available) of all 254 Texas counties and Texas’ 25 largest cities;
* Links to the online check registers of more than 150 Texas independent school districts;
* “Fast Facts” about Texas government spending;
* A glossary of key budget-related terms to help the public’s understanding of budget documents; and
* Videos featuring Combs, Rep. Mark Strama, Americans for Tax Reform president Grover Norquist, and others talking about the importance of transparency in government spending.

“Instead of having to walk into dozens of different government buildings or painstakingly search all over the Internet to find how tax dollars are being spent, you can simply go to TexasBudgetSource.com,” said Talmadge Heflin, Director of the Foundation’s Center for Fiscal Policy and a former chairman of the Texas House Appropriations Committee.

“Transparency forces government to be smarter about how it spends the taxpayers’ money,” Combs said in one of the videos to be featured on the site. “It creates a culture of transparency that guards against waste.”

“The Texas Public Policy Foundation has been a longtime champion of transparency in government spending,” Rollins said. “Not only have we shown the possibilities through the legislation that passed last year, but TexasBudgetSource.com provides a template that other states can follow to make government spending more accessible to taxpayers.”

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.

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