Dr. Megan Edison has raised an interesting point about a “healthy behavior” provision in the Obamacare Medicaid expansion bill just passed by the Michigan House and currently being considered by the Senate. Under the bill, enrollees would pay more unless they “demonstrate improved health outcomes or maintain healthy behaviors as identified in a risk assessment by their primary care practitioner.” Dr. Edison characterizes as “creepy” the requirement that doctors must track and report to the state whether their patients have met the standard.

The provision also shows how Republicans have erroneously framed the expansion in the same conceptual terms as post-1996 welfare reform. But Obamacare is not intended to be a “welfare” program in the same way as “Temporary Assistance to Needy Families,” to use the current bureaucratic term for what regular people call being “on welfare.” It's an “entitlement,” just like Medicare and Social Security.

In contrast, since 1996 cash welfare benefits are no longer an "entitlement." Instead, they are conditional on recipients jumping through various hoops dictated by the state, including work and job-training requirements, and a four-year cap on how long someone can collect.

The public implicitly understands the conceptual difference between "welfare" and "entitlement." The 1996 welfare reform was all about separating these, and most people have no problem with requiring welfare beneficiaries to jump through those hoops.

In the public mind, Medicaid falls somewhere between. As a practical matter it’s more like an entitlement, because in the end Americans will not accept a system that requires them to step over the ailing bodies of individuals who could be cured if only they could afford treatment. Still, the public has generally been willing to impose some conditions on Medicaid beneficiaries.

Here’s how this is relevant to Obamacare-driven expansion of the program by the Michigan Legislature: Because Medicaid is now a critical component of a new entitlement, the conceptual framework for it has changed, especially for the above-poverty population covered by the expansion. Medicaid has been transformed into the “lower rungs” of the Obamacare entitlement ladder.

To grasp the significance, imagine the uproar if Republicans in the Michigan Legislature tried to impose “healthy behavior” conditions on middle class Social Security and Medicare recipients.

If Obamacare survives, then all the above has huge (and corrupting) implications for Americans’ relationship with their own government. In the short term, it means this: Efforts by Michigan legislators to extract federal permission for substantive Medicaid “reforms” as a condition for accepting Obamacare’s expansion of the program are based on an obsolete conceptual framework. As such, they are likely to go nowhere in Washington.

The Michigan House Transportation and Infrastructure Committee is considering legislation to raise taxes on vehicle owners as a way to get more money for roads. Roads may need the extra attention but there is no need to increase taxes on net balance.

The current "tax-and-pave" approach is an implicit claim by politicians that nowhere in Michigan's $49.5 billion budget can they find a single line-item worth trimming.

Of course there are countless items in the budget this state could do without. In March I identified $344 million worth of savings. Coupled with other reforms the state could, at a minimum, avoid increasing automobile registration taxes or do so and offset those hikes with tax cuts elsewhere.

In the past decade, Mackinac Center analysts have recommended hundreds of other ideas for saving billions of dollars without touching Medicaid or the School Aid Fund. Some of these have been adopted, but there still are lots of spending-cut opportunities on the table.

Of course for every such decrease there is a special interest prepared to use all the tools of political manipulation to defend their turf. I won't pretend this is easy, but it is worth noting the politicians now proposing big road tax increases have not themselves suggested any big spending cut alternatives.

Incidentally, this tax increase debate should also be placed in some context. Michigan endured a $1.4 billion tax hike just six years ago. We did so under the promise that the income tax increase portion would be rolled back. That promised tax cut was stopped after a tiny one-tenth of 1 percentage point cut.

So how much of our money is enough? At what point will legislators collectively say, "Thanks taxpayers. Take a break. We've got all we need"?

Mackinac Center President Joseph G. Lehman writes in the current edition of The Ripon Forum about the “performance dashboards” utilized by Gov. Rick Snyder, noting both their positive and negative aspects and suggesting improvements.

Read the full article here.

Education Policy Analyst Audrey Spalding writes in an Op-Ed in the Midland Daily News that socioeconomic factors and their impact on student performance have to be taken into account when considering school performance.

On the morning of Tuesday, June 18, the Grand Rapids City Commission will consider transferring 163 or more properties to the Kent County Land Bank. These properties will not go to tax auction, where private individuals could bid on them.

If city commissioners approve this resolution, they will be helping the Kent County Land Bank circumvent state law, which forbids land banks from acquiring property prior to tax auction. Moreover, the land bank will have the ability to choose who can or cannot purchase these properties.

This move will cost taxpayers. If the properties were to go to tax auction, private bidders would bid up the price, assuring Kent County more sales revenue than the price the land bank will pay. 

Though the resolution calls for the land bank to complete redevelopment, repurpose, or resale within 18 months of acquiring the new properties, there are no assurances. By acquiring these properties, the land bank is placing Kent County taxpayers at risk: Plans fall through, and development costs money.

It is likely that the land bank will not be able to sell all 163 properties in just 18 months.  In contrast, the vast majority of these properties would likely sell at tax auction, with private developers and individuals bearing the costs and risks of development. 

The text of the resolution the Grand Rapids City Commission will consider and the full list of properties the land bank may acquire is available here.

Assistant Fiscal Policy Director James Hohman was a guest today on CNBC discussing Detroit’s ongoing fiscal difficulties.

Hohman has recently written about the city’s woes here and here.

House Bill 4714, Accept federal health care law Medicaid expansion: Passed 76 to 31 in the House
To expand Medicaid eligibility to families and childless adults up to 138 percent of the federal poverty level, which implements a key component of the federal health care law (aka “Obamacare”). Under that law, the feds are supposed to pay 100 percent of the expansion’s cost during the first three years, with the state responsible for not more than 10 percent of the costs starting in 2020. The House-passed version of the bill does not contain a provision in the original requiring the federal government to approve certain cost-saving state Medicaid reforms before the expansion may proceed. All but one Democrat voted "yes," and a majority of Republicans (30 out of 59) in the Republican-controlled House voted "no."

Who Voted "Yes" and Who Voted "No"

House Bill 4813, Create process for dissolving fiscally-failed school districts: Passed 58 to 49 in the House
To establish criteria and procedures for dissolving a school district that has become so financially unviable that it can no longer educate students, and for attaching the failed district’s territory to one or more nearby school districts. The bill was introduced after the Buena Vista and Inkster school districts reached this state shortly before the end of the 2012-2013 school year.

Who Voted "Yes" and Who Voted "No"

Senate Bill 284, Authorize electric bill surcharge for low income heating subsidies: Passed 86 to 21 in the House
To authorize imposing a $1 per month surcharge on customer electric utility bills, and use the money to provide up to $50 million annually in low income home heating subsidies.

Who Voted "Yes" and Who Voted "No"

Senate Bill 163, Revise wetland use permit details: Passed 66 to 42 in the House
To expand certain exemptions to a state wetland permit mandate, increase some wetland permit fees and reduce others, require permit denials to document their rationale and authority, authorize grants to local governments to create “wetland mitigation banks,” slightly reduce wetland regulatory burdens imposed on county drain commission projects, slightly increase the state's burden to justify restrictions on an owner's use of his or her property, prohibit the Department of Environmental Quality from imposing regulations that are beyond the scope of those required by federal law, and make other changes to these land use restrictions.

Who Voted "Yes" and Who Voted "No"

House Bill 4743, Allow local holiday fireworks regulations: Passed 37 to 0 in the Senate
To allow local governments to ban the use of "consumer fireworks" between midnight and 8:00 a.m. on the day before, day of, and day after a national holiday (in larger communities the allowable deadline would be 1:00 a.m. on New Years). The 2012 law legalizing these fireworks (which include firecrackers, bottle rockets, aerial spinners, Roman candles, etc.) essentially preempted local bans on their use at all hours during these holiday periods.

Who Voted "Yes" and Who Voted "No"

House Bill 4328, Final 2013-14 state budget: Passed 63 to 46 in the House
The final House-Senate compromise version of the non-education portion of the state government budget for the fiscal year that begins on Oct. 1, 2013. This would appropriate $34.392 billion, compared to $34.355 billion the previous year. (When interdepartmental transfers are deducted the amounts are slightly lower.)
When amounts appropriated for education are added (see House Bill 4228), the state budget for the next fiscal year will be $49.520 billion, of which $19.331 billion is federal money. Total state spending from state taxes, fees, fines, etc. will be $30.189 billion, a 4.0 percent increase over the previous year.

Who Voted "Yes" and Who Voted "No"

House Bill 4328, Final 2013-2014 state budget: Passed 24 to 14 in the Senate
The final House-Senate compromise version of the non-education portion of the state government budget for the fiscal year that begins on Oct. 1, 2013. See description above.

Who Voted "Yes" and Who Voted "No"

House Bill 4459, Prohibit TIFA “capture” of Detroit Zoo or Arts tax money: Passed 38 to 0 in the Senate
To prohibit the “capture” by a local Tax Increment Finance Authority (such as a Downtown Development Authority) of regional property taxes imposed to subsidize the Detroit Zoo and the Detroit Institute for the Arts.

Who Voted "Yes" and Who Voted "No"

Senate Bill 300, Establish and impose minimum indigent defense standards: Passed 32 to 6 in the Senate
To establish statewide standards and accountability measures for court-appointed attorneys who represent indigent criminal defendants, and establish a process by which all counties in the state would be required to conform with the standards. If a local government failed to adopt them, a state commission could take over its indigent defense administration, and impose a gradually increasing portion of the state’s costs for this, up to 40 percent. Locals would be responsible for maintaining funding at current levels, and all this would be subject to a detailed appeals process. The bill authorizes but does not fund state grants to cover increased costs.

Who Voted "Yes" and Who Voted "No"

Senate Bill 271, Revise corporate and developer subsidy regime: Passed 36 to 2 in the Senate
To increase the maximum amount of state “community revitalization” subsidies that can be awarded to a particular developer, corporation or other special interest, from $1 million to $2.5 million. The bill would also eliminate various statutory prescriptions and restrictions on how the political appointees on the Michigan Strategic Fund board may spend state revenues allocated to this subsidy program, and delete certain disclosure and reporting requirements.

Who Voted "Yes" and Who Voted "No"

Senate Bill 272, Authorize corporate and developer “port facility” subsidies: Passed 37 to 1 in the Senate
To expand the mission of the "Michigan Strategic Fund" agency to include providing undefined subsidies for corporations, developers and other entities involved in port facilities.

Who Voted "Yes" and Who Voted "No"

SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

A “favor” the Michigan Department of Corrections gave Jackson County has cost taxpayers millions of dollars, Fiscal Policy Director Michael LaFaive told The Jackson Citizen Patriot.

The MDOC has continued a contract with Jackson County, buying steam from the county’s incinerator to use at state prisons in Jackson, even though a 20-year contract between the two parties expired in 2007. The state kept the contract in place until this year, when bonds used to originally build the incinerator will be paid off. It would have been “unfair to leave the county with debt when they were trying to assist us,” a DOC spokesman told The Citizen Patriot as to why the state kept paying.

LaFaive said it was “unfair” to taxpayers for the state to do that.

“Providing an inter-governmental courtesy at the expense of taxpayers is wrong,” he said. “The MDOC has been providing Jackson with a financial courtesy at the expense of taxpayers.”

The state had been paying the county $3.6 million annually, and $2.4 million a year since 2010, according to the newspaper.

If the Republican-controlled Michigan Legislature votes to accept the Obamacare Medicaid expansion, it will prop-up an unpopular and vulnerable law that practically all members of the majority caucus have said should be repealed. How could this be? Wes Nakagiri, a savvy Tea Party leader from Livingston County, has explained one very possible scenario for his members:

Here is a small tidbit that most citizens do not know. Generally the majority party will not pass a bill out of committee unless a majority of their members vote yes. But House Bill 4714 (the Medicaid expansion) was voted out of committee even though a majority of Republicans on this committee were against the bill.  This is an indication of how badly the establishment wants to move forward with the Medicaid expansion.

…It is customary, but not mandatory, that Speaker of the House Jase Bolger would not schedule a vote on HB 4714 unless the bill has the support of at least 50 percent of the entire Republican caucus…typically (at least) 30 out of the 59 House Republicans. But I wouldn’t be surprised if he violates this custom. In theory, HB 4714 could pass with as few as five Republican votes as long as all 51 Democrats vote for the bill.

…I’ve heard establishment Republicans argue that this expansion won’t cost Michigan a dime because the federal government is picking up the tab. I’m astonished that there are Republicans that haven’t grasped the concept that our federal government is broke!

Piling on to Nakagiri’s last point, Michigan legislators will add $22 billion to the national debt through 2022 if they approve the Medicaid expansion.

This week Michigan Capitol Confidential reported a committee vote to adopt a substitute version of House Bill 4714, the Obamacare Medicaid expansion. The next day some of the Republicans named in that report voted against advancing this bill to the full House. These expansion opponents were Reps. Kevin Cotter, Ken Goike, Ray Franz, Tom Leonard and Dan Lauwers. While these legislators missed the chance to place a "speed bump" in front of Obamacare capitulation, on the more important committee action they voted against accepting the Medicaid expansion.

At the time the members of that committee may not have realized it, but the vote we reported did appear to be a key moment. This was consideration of the original bill with its waiver-in-advance-for-concrete-reforms officially ceased. Instead, consideration turned to "waiver-later-for- less-concrete-reforms," with "opt-out" contingencies so implausible as to appear a mere cover story for capitulation.

The vote was also worth reporting because it was House Republicans who made a big deal about the steep price in reforms they were demanding for Michigan's collaboration with Obamacare. But suddenly, this committee was offering surrender at a fire-sale price.

For context, right now it appears 19 states are saying no and six are leaning against Medicaid expansion — fully half the states in the union.

In addition, leaving aside the legality of a potential state “opt-out” from the expansion sometime down the road, and proposed statutory provisions related to that, and the political realities of halting future benefit checks once they have begun to flow, everyone in Lansing knows how this game is played: The federal expansion money will start rolling in, and in May 2018, under  an entrenched Obamacare, the supposed “savings” this legislation generates from its weak reforms won't be enough to make up for a programmed fall off in a 100 percent federal funding commitment. This will happen even though the bill appears to contain some razzle-dazzle, hospital-friendly, "indirect job" type provisions.

Everyone will be shocked — shocked! — and the appropriations committee chairs will ask their colleagues, "Are we going to leave nine federal Medicaid dollars on the table for an investment of just one state dollar?" Of course they won't.  In every possible way, the expansion is a “roach motel” — once we go in we’re not getting out.

Mackinac Center analysts have been clear — we don’t think any reforms are worth the price of entrenching Obamacare as long as resistance may still pay off in terms far more meaningful than marginal changes to a welfare entitlement program. Plus, under an entrenched Obamacare regime, "reform" is probably an oxymoron.

Yet I fear that legislative Republicans have lost sight of the stakes in this contest. Some of my Mackinac Center colleagues and friends are saying it must be part of a clever scheme to avoid capitulation, because those legislators can't really mean it.