5/24/2016

House defeats tax bill to fund budget
After about a three and one-half hour debate today, the House of Delegates voted
down SB 1005 containing taxes and revenues to fund the State’s 2017 budget by
a vote of 44 to 55.   The surprise negative voting compared to yesterday’s vote of
53 to 38 to increase taxes on tobacco products which were to make up part of the
budget.
The House Finance Committee approved the proposal last night that was given
to the full body earlier today.  The recommended legislation called for a 2 percent
cuts among all state agencies and a 10 percent cut in the executive branches —
governor’s office, secretary of state, attorney general and treasurer..
The House defeat of the legislation places uncertainties with such programs as
PEIA, Promise Scholarships, higher education, public education and Medicaid.
According to statements made by legislative leaders on the floor of the House
today, revenues will be down $300 million by June 30, 2016 — greater than the
$279 million estimate.
Dentists may wish to monitor their Medicaid accounts receivable over the next
several weeks — at least until the Governor and Legislature reach an agreement
on taxes and budget to begin the fiscal year July 1, 2016.  The Medicaid agency
has to provide funding to the managed care organizations (MCOs) so they can
process claims and pay providers.  Since revenues are declining, payments to
providers by the MCOs can be expected to be slow — as reported to providers
by Medicaid a few weeks ago.