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A Lesson in Making a Bad Bill Worse

pheitzinger — Wed, 22 May 2013 22:26:34 +0000

One amendment would have activated the circuit breaker if the federal government ever dropped its share of the cost below the promised 90 percent, but every senate Democrat and five Republicans voted the amendment down, signaling that the Feds should feel free to increase Arizona's costs.

Another amendment would have required an independent audit to ensure hospitals don’t pass the provider tax on to patients. Expansion proponents voted the amendment down, making it easier for hospitals to illegally pass the cost along without fear of being caught.

An amendment was offered to require an annual report on the quality of care provided by AHCCCS, Arizona’s Medicaid program. Although taxpayers have a right to know whether their money is being put to good use, these same senators voted the amendment down. Without this transparency, proponents can continue to assert how well the program works without risking evidence to the contrary.

This coalition also voted down amendments designed to curtail non-emergency use of emergency rooms and ambulances, which result in high, unnecessary costs to the state. Likewise, they voted down amendments to require health professionals and pharmacists to check the prescription monitoring database before authorizing or filling a member’s prescription for a controlled substance such as Oxycodone, Percocet, or Vicodin. These amendments would have saved taxpayers from paying for and enabling addictions to these medications.

While the Medicaid expansion is a costly and misguided policy, these amendments were not poison pills but sensible ways to mitigate some of the costs and prevent abuse. The proponents, however, made a bad bill much worse by rejecting these amendments. Thankfully, the Senate does not have the last word. While we hope the House declines the Medicaid expansion, at a minimum, we hope it supports some common sense amendments that will help protect taxpayers.

Learn more:

Top 10 Reasons to Reject Medicaid Expansion

Senate Bill 1492 as passed by the Arizona Senate

Four Reasons Why The Oregon Medicaid Results Are Even Worse Than They Look

Last week, the Arizona Senate passed Medicaid expansion. Sadly, the proponents were not satisfied with merely passing a program expansion we can’t afford; they actively worked together to kill a series of common sense amendments that would have prevented extra expense and abuse. Thursday, May 23, 2013 (All day)YesGovernment Spending Government Accountability BlogYesMedicaid, expansion, amendment, circuit breaker, audit, provider tax, By TopicsChristina Corieri

Pension Systems Looting the Taxpayer

pheitzinger — Wed, 22 May 2013 05:18:58 +0000

In 2011, after the Arizona Republic published a series of articles exposing pension abuses, a number of reforms to prevent costly abuses were put into place. One reform restricted what could be considered income for someone near retirement. Before the 2011 reforms, the pension amount was set based in part on the last three years of income. So a common abuse was to boost income during the last three years by counting income not part of one’s regular salary, including overtime and payouts for unused overtime and sick leave. Padding one’s income in this way set a higher pension level.

It turns out the practice is still alive and well – it has just emerged in a new place. The City of Phoenix is padding retirees’ pensions by counting compensation for unused vacation and sick time as income. The loophole is that Phoenix pays this compensation over time instead of in one big check, making the practice harder to discover. This is so lucrative that one retired employee is making more retired than when he showed up for work.

Lest you snicker at the cleverness of it all, keep in mind that all four of the state’s public employee pension systems are in financial trouble and taxpayers are paying more into the system to keep them afloat. Pension contributions have increased six times faster than the state GDP. We are paying more taxes and giving up services to fund lucrative retirements.

Pension plans will always be gamed. One loophole closed today will turn into another loophole tomorrow. There is just too much temptation in giant, multi-billion dollar funds for someone not to think of ways to loot them. Phoenix officials should be prosecuted for violating the law, but the only long-term solution for taxpayers is to pop the pension balloon and move public employees to defined contribution (410(k)-style) retirement benefits.

Learn more:

Goldwater Institute: Defusing the Pension Bomb: Making Retirement Plans Solvent for All Public Workers

Arizona Republic: Phoenix pension spiking is a slap to taxpayers

Arizona Republic: Legality of boosting Phoenix pensions in question

Have you ever squeezed a balloon and had parts of it squeeze out between your fingers? Unless you pop the balloon with a pin, it will reemerge somewhere else when you squeeze it. Public employee pensions have become balloons, and abuse of public pension systems keeps oozing despite attempts to put the squeeze on it.Wednesday, May 22, 2013 (All day)YesGovernment Spending City & Local Reform Government Accountability BlogYesPension, balloon, retirement, abuse, reform, overtime, sick leave, loophole, public employee,By TopicsByron Schlomach

Who’s Next on the IRS’s List?

pheitzinger — Mon, 20 May 2013 21:11:06 +0000

In upholding the federal health care law’s individual mandate as a tax, Chief Justice John Roberts reiterated Justice Oliver Wendell Holmes’ promise that “[t]he power to tax is not the power to destroy while this Court sits.” With the IRS’ recent targeted investigations of tea parties, balanced budget advocates, and constitutional study groups across the nation, the Chief Justice may soon have the opportunity to keep his promise.

The IRS is the chief enforcer of the federal health care law. In deciding when to impose the individual mandate penalty, the IRS will have to determine whether taxpayers have “qualifying health insurance coverage,” whether employers should be penalized for failing to provide such insurance to their employees, and if various exemptions apply. In the wrong hands or subject to the wrong directives, this immense power could all-too-easily result in the IRS rooting through private medical records and billings. The federal Health Insurance Portability and Accountability Act already authorizes your physician, hospital and insurance company—and their business associates—to disclose your personal medical information, history and records to government agencies for law enforcement and regulatory purposes without your consent.

Ever since the McCarthy era of the 1950s, courts have established that the taxing power may not be wielded to punish political enemies. The Court of that era probably never foresaw the day when its rulings would be applied to protect those who believe in constitutionally limited government, as opposed to those who sought to overthrow it. But there is no more important time than the present to revitalize and apply such limitations on the federal government’s power to tax.

In a twist that is almost unbelievable, news agencies reported last week that the same person who oversaw the targeting of conservative groups seeking tax exempt status will be responsible for overseeing the IRS’ enforcement of the federal health care law. We should all shudder at the thought.

Learn more:

Washington Times: White House aide: Nothing that suggests’ IRS official at center of scandal ‘did anything wrong

Speiser v. Randall, 357 U.S. 513 (1958)

HIPPA Disclosure Regulations

ABC News: IRS Official in Charge During Tea Party Targeting Now Runs Health Care Office

Communities Putting Prevention to Work, or Communities Participating in Pork Wars?

pheitzinger — Wed, 15 May 2013 23:33:41 +0000

Uncle Sam thinks he knows what’s right for your health, and he’s using your hard-earned money to teach you that lesson. Two years ago, the Goldwater Institute reported that the Centers for Disease Control and Prevention (CDC) gave Pima County, Arizona nearly $16 million through its Communities Putting Prevention to Work program to reduce obesity and promote healthy lifestyles. Our friends at Cause of Action, a watchdog organization that reports on government waste, have released a report detailing how Pima and other counties have been spending your tax money.

In Pima County, the money is funding a contract with the University of Arizona to develop restrictive zoning codes for “green-space development” and government programs that will encourage people to make “informed dietary choices.”

The Cause of Action report also gives us a peek at what could be on the horizon if the CDC continues to push its paternalism. Alabama, Georgia, and California have all used Communities Putting Prevention to Work money to lobby for new taxes on unhealthy activities, such as drinking soda and using tobacco products. This advocacy, which is part of the CDC’s long-declared proclivity for encouraging local governments to “control the food environment,” may even violate federal laws that prohibit lobbying with taxpayer dollars.

The government has no business using our money to dictate what we eat. Local governments like Pima County should stop selling out our freedom to win the federal pork wars.

Learn more:

Cause of Action: CPPW: Putting Politics to Work

Goldwater Institute: Pima County has super-sized plan for starving private property rights

CDC: Healthy Food Environment: Zoning

Cheaters Revenge Meets the New World Order

pheitzinger — Wed, 15 May 2013 00:42:27 +0000

The federal government has been prosecuting Carol Anne Bond for causing minor burns to the fingers of her husband’s girlfriend after spreading a caustic chemical used in developing photographs around her home. Ms. Bond has fought the prosecution by arguing that the Constitution gives power over such domestic disputes to the States. According to the U.S. Court of Appeals for the Third Circuit, Congress implemented a chemical weapons treaty by enacting a law that expands the treaty’s purpose and turns “each kitchen cupboard and cleaning cabinet in America into a potential chemical weapons cache.” In an earlier phase of the litigation, Justice Samuel Alito asked, “Suppose that the Petitioner in this case decided to retaliate against her former friend by pouring a bottle of vinegar in the friend's goldfish bowl. As I read this statute, that would be a violation of this statute, potentially punishable by life imprisonment, wouldn't it?”

In support of Ms. Bond’s argument that the federal government has overstepped its constitutional powers, the Goldwater Institute today filed an amicus brief before the U.S. Supreme Court in Bond v. United States of America. Our brief warns that if courts allow Congress to implement treaties without respecting the Tenth Amendment’s limitation on federal power, there is nothing to stop the federal government from using international agreements and legislation to displace other constitutional guarantees. This is because the vertical separation of powers between the states and the federal government is not a second-class constitutional protection. Allowing a treaty to undermine the Tenth Amendment opens the door to Congress enacting treaties that violate all constitutional protections – including the freedom of the press and the right to due process. That is why the Court must draw a bright line at kitchen cupboards and cleaning cabinets.

Ms. Bond won the first round when the Supreme Court reinstated her Tenth Amendment defense after the lower court rejected it on procedural grounds. Her case then returned to the lower courts, only to result in the Third Circuit rejecting her defense on the merits. Now the Supreme Court gets the last word. Hopefully, the Court will hold the line.

Learn more:

Goldwater Institute Amicus Brief

Petitioner’s Merits Brief

First Supreme Court Decision (Bond I)

Oral Arguments during Bond I

Third Circuit Decision

What does poisoning a goldfish to get revenge on a cheating spouse have to do with the President’s power to make treaties? The constitutionally correct answer is: Nothing at all. Unfortunately, that’s not how the Obama Administration sees it. The Administration is claiming power to get into a domestic dispute under the authority of a chemical weapons treaty. And it is aggressively advancing the proposition that Congress’s power is essentially unlimited when based on the treaty power.Wednesday, May 15, 2013 (All day)YesConstitutional Rights State Powers BlogYes Oral Arguments Bond I 09-1227.pdf 12-158 tsac Goldwater Institute.pdfPresident, Treaty, treaties, constitution, Chemical, Weapons, Carol, Anne, Bond, Samuel, Alito, Amicus brief, Supreme Court, Tenth Amendment, By TopicsNick Dranias

In the Economic Horserace, Government is a Terrible Gambler

pheitzinger — Mon, 13 May 2013 21:05:08 +0000

The Arizona House recently approved letting state government play venture capitalist with taxpayer money. At the moment, the measure is languishing in the Senate Rules committee. The bill would authorize the Arizona Commerce Authority to use insurance premium tax revenue to fund high-tech start-ups.

Not surprisingly, all House Democrats voted for it, while nearly 40 percent of the Republican caucus opposed.

The Senate would do well to let this bill die. Studies of all types of government investment programs show that government has a terrible track record of making good bets. The programs that purport to encourage investment and job growth always seem to, at worst, end badly and, at best, have no effect – all at taxpayer expense. One of the most comprehensive surveys of the research on state-based economic development policies appeared in the Journal of the American Planning Association in 2004. The authors concluded that “The most fundamental problem is that many public officials appear to believe that they can influence the course of their state and local economies through incentives and subsidies to a degree far beyond anything supported by even the most optimistic evidence.”

The best formula is instead to maintain a level-playing field and not favor some companies over others. To put it in horse racing terms, state government really needs to be in the business of making sure the starting gates don’t jam and that the track is well-maintained. They shouldn’t be rushing to the betting window.

Learn more:

Goldwater Institute – Government: A lousy venture capitalist

Inside Tucson Business – Tech Council pushes for high tech investment fund

Mackinac Center – Review of literature on economic development incentives

Recently the very fashionable turned out to bet on their favorites in the Kentucky Derby. But betting on horseraces – economic horseraces – has been all the rage in legislatures across the country for decades. Unfortunately, legislators are more like problem gamblers than successful high-dollar poker stars. Tuesday, May 14, 2013 (All day)YesGovernment Spending Government Accountability BlogYesGamble, Gambling, Arizona, Commerce, Authority, insurance premium, Journal, American Planning Association,By TopicsStephen Slivinski

A Tale of Two Cities

pheitzinger — Thu, 09 May 2013 00:12:39 +0000

Phoenix and New York City are separated by 2,500 miles, but the distance between them in terms of education innovation can only be measured in light years.

Last week, the Arizona Republic ran a story titled, “How school choice has reshaped Arizona,” looking at open enrollment policies, the number of charter schools, and education savings accounts, the most innovative education solution in the country. And don’t forget tax credit scholarships, virtual schools, and a homeschool law. With all these options for parents, “districts from the southwest valley to Paradise Valley have poured money into specialty programs that cater to niche interests in their communities” and “Arizona students can learn to speak Mandarin, study dance, become young engineers or delve into the medical sciences.”

Traditional schools, charter schools, and private schools try to attract parents and their children by out-doing one another through challenging programs. What an amazing place to live, where schools are watching where parents are going and trying to offer classes and programs that get their attention.

Meanwhile, on the other side of the continent in New York City, the New York Times ran a story titled “The Get-Into-School-Card,” referring to a family’s address. “Moving to a particular neighborhood in order to land a seat at a coveted public school has long been the middle-class modus operandi for obtaining a high-quality education in New York, where placement in many elementary schools is determined by home address.”

Unfortunately, New York families are finding out after they move that overcrowding in good schools is causing them to be re-zoned into boundaries for other schools. Parents wind up putting children on charter school waiting lists or resort to an “outright lie by borrowing an address from a friend or relative to get their children into a school.”

For parents looking for a great opportunity for their child, Arizona has told parents they have choices, and traditional districts are “inspire[d]…to improve options.”

In New York, parents without a good neighborhood school have to do it the old fashioned way: Move.

Learn more:

Goldwater Institute: School Choice Catalogue

Arizona Republic: How school choice has reshaped Arizona

New York Times: The Get-Into-School-Card

Phoenix and New York City are separated by 2,500 miles, but the distance between them in terms of education innovation can only be measured in light years. Thursday, May 9, 2013 (All day)YesEducation Reform BlogYesPhoenix, New York, school, choice, charter, education, savings, option,By TopicsJonathan Butcher

Medicaid Expansion Will Line Hospitals’ Pockets

pheitzinger — Tue, 07 May 2013 21:25:33 +0000

Uncompensated care is made up of two things: charity care and bad debt.

Charity care is free or discounted care hospitals provide to people below a certain income level, usually 150-200 percent of the federal poverty level. The nonprofit Banner Health hospital network netted a very healthy $296 million in 2011, while charity care composed a mere 2.8 percent of their expenses in 2011. At Yavapai Regional, another non-profit hospital which increased its net revenues by over $17 million between 2010 and 2011, charity care represented only .5 percent of total expenses. Charity care is far from breaking the bank.

Bad debt, by far the largest portion of uncompensated care, is when a patient does not qualify for charity care because they are above the income threshold but they fail to pay their bill. It encompasses uninsured patients but also insured patients who fail to pay their co-pays, deductibles, or co-insurance. Bad debt will be unaffected by Medicaid expansion because the people in this category will still not be eligible for Medicaid coverage because they will be above the income limit. Furthermore, hospitals report bad debt at their “charge rates” rather than their actual cost, which effectively hides millions, or in the case of giants like Banner hundreds of millions, in additional net profit by making their uncompensated care costs appear much higher than they actually are.

In inflating uncompensated care numbers, hospitals point to “unreimbursed Medicaid,” the difference between the cost of providing care to Medicaid patients and the reimbursement rate from the government, which hospitals constantly say is too low. This number will only increase under the proposed Medicaid expansion because hospitals will claim additional unreimbursed Medicaid for each Medicaid patient they treat. As the number of people on the Medicaid rolls grows, so will the claim of unreimbursed Medicaid. Don’t be surprised if this leads to a plea from the industry for an increase in reimbursement rates, an increase that taxpayers would have to cover.

Experience shows that even if Arizona did expand Medicaid, hospitals would still report increasing uncompensated care numbers. In 2009, the Arizona Hospital and Health Care Association commissioned a report which found that during the first eight years of the Prop. 204 Medicaid expansion, uncompensated care increased by an average of 9 percent per year. We must ask hospitals why they expect a different result this time around.

In truth, hospital profits are more than healthy. This is not an industry that needs more taxpayer dollars. The legislature should be wary of the story hospitals are selling.

Learn more:

Top 10 Reasons to Reject the Medicaid Expansion

Tax Filings for Nonprofits

Time: Why Medical Bills Are Killing Us

In the debate over expanding Medicaid to cover more low-income Arizonans, we are being told that the costs for uncompensated care at Arizona hospitals are soaring, making Medicaid expansion necessary to prevent financial disaster from befalling our hospitals. A closer look reveals that this claim is simply untrue. Wednesday, May 8, 2013 (All day)YesGovernment Spending BlogYesMedicaid, expansion, hospital, banner, yavapai regional, bad debt, uncompensated, care, unreimbursed, prop, 204,By TopicsChristina Corieri

Time to End the Costly Renewable Energy Mandate

pheitzinger — Mon, 06 May 2013 21:38:23 +0000

In 2006, the Arizona Corporation Commission (ACC) passed the Renewable Energy Standard and Tariff, requiring 15 percent of Arizona’s electricity to come from renewable sources, including wind, solar, biomass, and geothermal technologies, by 2025.

Beacon Hill estimates that in 2025 the ACC mandate will cost Arizonans between $239 and $626 million and from 1,500 to 4,100 jobs, with electricity prices 4 to 10 percent higher than otherwise. Odds are the economic damage is understated since costs like connecting windmills to the grid can only be guessed. Texas is spending $7 billion to connect its “Cuisinarts of the sky” (windmills kill birds by the bushel) to its grid. Beacon Hill accounts for costs associated with coal and gas backup facilities that prevent brown outs on still and cloudy days.

But there’s more to consider than just costs. Renewable technologies reduce carbon emissions, but the construction and decommissioning of renewable energy facilities produces more carbon than coal and gas facilities. The carbon advantage accrues from the production of electricity.

Recently The Economist, a publication strongly in the global warming corner, acknowledged there has been no warming for more than a decade, contrary to global warming theory. Despite what some may say, there is still a debate about the threat carbon emissions pose.

For the sake of intellectual honesty, jobs, and efficiency the ACC needs to revisit its Renewable Energy Standard and Tariff regulation.

Learn more:

Beacon Hill Institute: The Economic Impact of Arizona’s Renewable Energy Standard and Tariff

RealClearPolitics: The End of an Illusion

MasterResource: Texas Wind Power

The Economist: A Sensitive Matter

Outside Star Trek’s mythical “dilithium” power crystals, there is no such thing as clean energy. That’s one lesson learned from a new Beacon Hill Institute report, The Economic Impact of Arizona’s Renewable Energy Standard and Tariff. The report illuminates the expense of renewable energy as well.Tuesday, May 7, 2013 (All day)YesGovernment Spending BlogYesClean Energy, Beacon Hill, Institute, Renewable Energy, Standard and Tariff, Arizona Corporation Commission,By TopicsByron Schlomach

A Makeover for the Cosmetology Board

pheitzinger — Wed, 01 May 2013 22:24:41 +0000

Thanks to a Goldwater Institute lawsuit and the courage of a local entrepreneur, the Arizona Board of Cosmetology has gotten a makeover.

The Board went after cancer survivor Lauren Boice’s small business, threatening to shut her down. Lauren started her business, Angels on Earth Home Beauty, after witnessing firsthand how beauty services lifted the spirits of homebound patients. Her unique business connects the elderly, sick, and terminally ill, with licensed cosmetologists who can perform haircuts, manicures, or massages right in clients’ homes. Lauren’s services have been in high demand.

But the Board of Cosmetology had its own demands. It told Lauren it would regulate her phone business as if it were a beauty salon. The Board forced Lauren – who does not practice cosmetology – to get licensed and open a physical salon, even though her homebound clients would never visit it.

The Goldwater Institute took Lauren’s fight to court to defend her constitutional right to earn a living and help her sick clients. After a 16-month legal battle, the Board agreed to a binding settlement, assuring it would never regulate Lauren or other businesses like hers.

This is a great victory for freedom. Thanks to this settlement, entrepreneurs like Lauren Boice can focus on serving their clients rather than navigating the Board’s labyrinth of red tape.

But many still find themselves at the mercy of regulatory boards that stifle innovation, deprive entrepreneurs like Lauren of their right to earn a living, and punish those who provide services to the public.

Lauren spent years battling the cosmetology board in and out of court just to arrive at the common-sense conclusion that a cosmetology board doesn’t have the power to regulate a phone dispatch business. When regulators overstep their boundaries, they stall businesses and waste resources. Perhaps it’s time for the legislature to make over other bureaucracies.

Learn more:

Goldwater Institute Media Advisory: Board of Cosmetology will Cease Regulating Small Businesswoman

Goldwater Institute: Six Reforms to Occupational Licensing Laws to Increase Jobs and Lower Costs

Nails Magazine: Arizona State Board Faces Lawsuit from Dispatch Service that Sends Cosmetologists to Homebound Clients

Thanks to a Goldwater Institute lawsuit and the courage of a local entrepreneur, the Arizona Board of Cosmetology has gotten a makeover.Thursday, May 2, 2013 (All day)YesGovernment Red Tape Business & Job Creation BlogYesChristina, Sandefur, Arizona, Board, Cosmetology, Lauren, Boice, Boice v. Aune, Angels on Earth, Home Beauty,By TopicsChristina Sandefur