LANSING — Gov. Rick Snyder’s budget proposals for the next fiscal year that steer funding to expand Medicaid and that upgrade the state’s aging road system are sure to generate the most debate among lawmakers.
The governor wants to generate $1.2 billion over a decade by increasing the state gas tax from 19 cents to 33 cents per gallon, and from 15 cents to 33 cents for diesel fuel, and raise registration fees by an average of $120 annually per vehicle.
In his budget proposal, Gov. Snyder argues that not increasing funding for transportation will only cost far more in the long run. While 83 percent of the state’s trunklines are considered in good or fair condition, that percentage is projected to decline to 49 percent within five years and 39 percent within a decade, pushing the cost to fix the roads to a “staggering” $25 billion.
“The time for investment in our transportation network has never been more critical,” states the governor’s Feb. 7 budget proposal. “The costs of continued inaction are significant. … From a fiscal perspective, it is far more cost-effective to repair a road or bridge now than to pay for a much more costly reconstruction in the future.”
Meanwhile, the expansion of Medicaid, if approved by the GOP-controlled Legislature, would immediately make an estimated 320,000 Michiganders eligible for Medicaid, and would open the program to more than 470,000 people by 2021. In proposing the expansion, Gov. Snyder argued it would reduce Michigan’s uninsured population by 46 percent and reduce the uncompensated costs for hospitals to care for people who are uninsured.
Bringing more people into Medicaid and enabling them better access to primary care could alleviate the number of patients who go to emergency rooms when they have a health problem. People eligible for coverage under the expansion could enroll in one of the 13 Medicaid HMOs in the state, Gov. Snyder said.
“This unique opportunity to provide health care to Michigan’s low-income population will improve the quality of care and health outcomes for the most vulnerable,” the budget proposal states.
The Michigan Health and Hospital Association estimates uncompensated care — a combination of bad debt and charity — cost Michigan hospitals $882 million for the 2011 fiscal year. The organization supports expanding Medicaid, as do some other business organizations, including the Small Business Association of Michigan and Michigan State Medical Society.
But not all business groups were on board with the governor’s proposals. In a statement, the Michigan chapter of the National Federation of Independent Business (NFIB) said it may have to “agree to disagree” on the Medicaid expansion and infrastructure portions of the budget proposal. The organization has not yet issued a formal position on the Medicaid expansion and plans to survey its members, but “in other states where NFIB has polled members on the issue they have not been supportive of the concept,” the organization said in a statement.
In the state House, Speaker Jase Bolger, R-Marshall, is unconvinced for now on increasing gas taxes and fees for roads and expanding Medicaid, although he is open to working with the governor on both if “we are doing everything we can to protect taxpayers while finding solutions.”
Bolger “remains cautious and concerned on behalf of taxpayers about the expansion of Medicaid,” spokesman Ari Adler said in an email.
“The federal government has a history of working with states to start long-term programs while providing only short-term funding, and then sticking state taxpayers with the future financial liability that program creates,” Adler said. “House Republicans aren’t raising questions as a way to object, we simply want to make sure we have the answers we need before making any decisions.”
Under the federal Affordable Care Act, the federal government would cover 100 percent of the costs for the first two years and then 90 percent afterward.
On road funding, Bolger wants to hear more on the governor’s plan and is willing to work on a solution, although “taxpayers are the last place we should turn to for money and, if we do, it should only be done after we have explored every possible avenue to use existing funding sources as efficiently and effectively as possible,” Adler said.
“One concern Speaker Bolger has is people immediately jumping to an answer when all of the questions have yet to be asked,” he said.