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East Oregonian
Provider tax referral puts $333M in play
By CLAIRE WITHYCOMBE
Capital Bureau
SALEM — If a trio of
Republican
lawmakers
is successful in referring
a major state health care
financing law to the ballot,
at least $333 million in state
revenue could be at stake.
House Bill 2391 specifies
how the state collects money
to pay for the Oregon Health
Plan, the state’s version of
Medicaid, through assess-
ments and taxes on health
care providers.
It’s expected to raise $605
million in revenue in the
next two years, according
to revenue impact estimates
compiled in mid-June by
the nonpartisan Legislative
Revenue Office.
But a referral, which
would freeze certain parts
of the legislation from going
into effect, could mean the
state would not collect $333
million of expected reve-
nues in the next two years,
according to State Rep. Dan
Rayfield, D-Corvallis, who
cited figures Wednesday he
said he received from the
Legislative Fiscal Office.
That amount of money
couldn’t be leveraged to get
a federal match, causing the
state to forgo more money
it’s built into its upcoming
budget, Rayfield said.
Federal funds pay for
most of the Medicaid
program for traditional
populations as well as
people newly qualified for
Medicaid under the recent
Affordable Care Act expan-
sion.
Three Republican state
lawmakers — Rep. Julie
Parrish,
R-Tualatin/West
Linn; Rep. Cedric Hayden,
R-Roseburg; and Rep. Sal
Esquivel, R-Medford —
seek to refer certain parts of
the measure to voters. They
contest the legislation’s
funding mechanism, saying
that taxes on insurance
premiums and a “true tax”
on certain hospital net
revenues will be passed to
consumers.
If the petitioners gather
58,789 signatures by Oct. 5,
those parts of the legislation
go to the ballot. They would
not go into effect unless
upheld by voters in a special
election Jan. 23, 2018.
If voters approve the
assessments and taxes in
question, though, the money
could be collected retroac-
tively, Rayfield said.
The parts of the legisla-
tion the group wants to refer
are:
Thursday, July 13, 2017
EXTENSION: Voters will have
the final say on special district
Continued from 1A
Courtesy of Oregon Department of Transportation
If a referral of portions of the health care provider tax
goes on the ballot, the state could forgo as much as
$333 million in expected revenue unless the measure
is approved by voters.
“Truth is, I’m
trying to save us
from a big blow-
up in Medicaid.”
— Rep. Cedric
Hayden, R-Roseburg
• A 1.5 percent tax
on premium equivalents
paid for public employee
health plans to the Public
Employees Benefit Board,
which oversees health
benefit plans for some of the
state’s public employees.
• A tax on insurers —
calculated as 1.5 percent of
gross premiums earned.
• A section of the law
that says that insurers can
increase premiums on poli-
cies by 1.5 percent.
• A 1.5 percent tax on
managed care organizations
— also called Coordinated
Care Organizations, or
CCOs — the networks of
health care providers who
serve patients on the Oregon
Health Plan.
• A 0.7 percent “true tax”
on net revenues of certain
hospitals.
Parrish
argues
the
controversy over House
Bill 2391 and its possible
referral is merely the most
recent in a series of issues
in state health care policy,
including the state’s failed
attempt at its own insurance
exchange and hiccups in
redetermining
individual
eligibility for the Oregon
Health Plan.
Part of the petitioners’
strategy: brand the tax as a
“sales tax on health care.”
In Oregon, where voters
seem to relish the fact that
there is no state sales tax,
that framing may prove
effective.
Rayfield criticized what
he called the referral effort’s
“manipulative tactics” and
accused Parrish and Hayden
of playing politics with
Medicaid.
He believes the hospital
“true tax” will not get
passed on to consumers,
and says that insurance
premium
taxes
were
previously agreed upon by
the Legislature to fund an
earlier program for chil-
dren’s health that was made
obsolete by the Medicaid
expansion. That left “head
room” for the state to use
that funding mechanism
again, Rayfield said.
The Corvallis Democrat
also argues that should the
referral be successful and
the specific aspects of the
legislation get voted down,
legislators would have to
find new revenues or make
cuts to the health services
that the program covers.
Hayden, a dentist who
provides care to patients
on Medicaid, contends the
state won’t kick people off
Medicaid even if the referral
is successful, given how
much money the program’s
expansion has brought into
the state.
“Truth is, I’m trying to
save us from a big blow-up
in Medicaid,” Hayden said.
“And I think the referral
would force this to come
back to the legislature and
come up with a plan that
doesn’t put us at risk.”
Instead, he has proposed
using OHA’s reserves and
increasing existing assess-
ments rather than the new
taxes. Rayfield charged that
Hayden’s plan doesn’t add
up, and that it lacked bipar-
tisan support in the Oregon
Senate.
———
The Capital Bureau is a
collaboration between EO
Media Group and Pamplin
Media Group.
Mary Corp, who serves
as both the regional admin-
istrator for OSU Extension
and director at CBARC,
said the districts would add
much-needed sustainability
to the budget. Twenty-five
of Oregon’s 36 counties
already have extension
districts in place.
Both county boards
of commissioners would
oversee the districts and set
their budget committees,
constituting three citizens
and three commissioners.
Corp said they are
aiming for May 2018
to place the district on
the ballot, though it will
be a long process going
forward.
First, OSU Extension
must convince Umatilla
and
Morrow
county
commissioners to approve
an order initiating the
development of a special
district. Then, Corp said
they will be looking to get
resolutions of support from
all 17 incorporated cities
across the two counties.
Voters will have the
final say, and though new
taxes are never the most
popular choice, Corp said
she is confident in the
communities’ support for
OSU Extension.
“People really see a lot
of value in the work we
do,” Corp said.
As it stands, OSU
Extension
is
already
supported in part through
general fund dollars from
both counties. In their most
recent budgets, Umatilla
County will be contributing
$321,090 while Morrow
County has earmarked
$167,065.
Still, Corp said funding
is on the decline due to cuts
in state and federal funding.
That has left OSU Exten-
sion without the ability
to fully staff programs or
address new needs.
An advisory group
consisting of eight different
stakeholders
started
meeting about a year and
a half ago to go over their
options, and they decided
“It’s one of those things where the
return on investment is many times
over. We’re talking high-value op-
erations that require a high level of
sophistication. That’s the return we’re
getting from cooperative extension.”
— George Murdock, Umatilla County commissioner
in May that a service
district would be the best
choice to generate long-
term stability.
The
agricultural
research stations, mean-
while, are also finding
themselves scraping for
funding. Back in 2008, the
university decided that 25
percent of each station’s
budget must come from
local dollars, and since
then Corp said CBARC
has received a block grant
worth $250,000 from the
Oregon Wheat Growers
League.
“If I didn’t have that
block grant coming in, I
would be in the red,” Corp
said.
However, Corp said the
Wheat Growers League
no longer has the money
to continue that level of
support as wheat prices and
acreage decline.
“They’ve told me they
see this (grant) sunsetting
very soon,” she said.
At HAREC, director
Phil Hamm said he has also
had to go fundraising for
as much money as he can
just to keep the doors open.
Some dollars have come
from the Oregon Potato
Commission, and some
from local growers.
“It’s been a pain in my
neck to go out and search
for dollars,” Hamm said.
An extension district
would ensure the facilities
remain in shape, Hamm
said, with substantial
economic rewards for the
region. Agriculture contrib-
utes roughly a half-billion
dollars in farm gate value
for both Umatilla and
Morrow counties, and that
total increases to $1 billion
if you add in the value
from trucking and food
processing.
OSU Extension helps
to keep the industry
thriving with programs and
research, Hamm said.
“We have provided what
our stakeholders would say
is very important informa-
tion for what they do,” he
said.
OSU Extension will
make its initial pitch to
Morrow County commis-
sioners on Wednesday,
July 19. The same presen-
tation will also be given to
Umatilla County commis-
sioners, though a date has
not yet been set.
Don Russell, Morrow
County
commissioner,
said Corp has already met
with each commissioner
individually. Initially, he is
in favor of the district but
has some questions about
whether the state will pull
additional funding if it
moves forward.
George
Murdock,
Umatilla County commis-
sioner, said the county is
extremely supportive of
OSU Extension.
“It’s one of those things
where the return on invest-
ment is many times over,”
Murdock said. “We’re
talking high-value oper-
ations that require a high
level of sophistication.
That’s the return we’re
getting from cooperative
extension.”
Hamm said the district
would be beneficial across
all sectors of extension,
from farmers to families
with children in 4-H.
“It’s nice to see all these
folks appreciate what we
do,” he said.
———
Contact George Plaven
at
gplaven@eastorego-
nian.com or 541-966-0825.
STORE CLOSING SALE!
BOUNDS: Vetting process can take months
Continued from 1A
Trump’s pick for Supreme
Court,
Neil
Gorsuch,
Bounds is a member of the
Federalist Society, a group
that aims to get conservative
lawyers into judgeships. He
just turned 44.
Because of Bounds’ rela-
tive youth, Walden wrote in
a Jan. 25 letter to Trump, “he
is ideally situated to cement
your legacy as president
by serving on the court for
decades in the future.”
But it’s been nearly
six months since Walden
recommended Bounds and
McLane, and Trump, in his
first rounds of judicial and
U.S. attorney nominations,
floated nobody for the
Oregon jobs.
Vetting can take months.
Critics say the new adminis-
tration has been slow to get
its act together, and some
people accuse Democrats of
throwing up roadblocks in
Washington, D.C.
And yet the delay has
nevertheless caused ques-
tions to start to swirl in local
legal circles: Will Bounds
and McLane actually be
nominated, or are they not
the shoo-ins they were
thought to be? Might the
White House be looking
at other, more experienced
candidates, like federal
Judge Michael Mosman or
incumbent U.S. Attorney
Billy Williams, for those
jobs?
Walden’s office declined
to comment. But a spokes-
woman for Sen. Jeff
Merkley, D-Portland, said
the delay is not on his end,
adding that the White House
has barely started to engage
in the customary consulta-
tion with the state’s senators
over such picks.
“Sen. Merkley plans to
use the same process for
judicial nominations that
has served the state well
for years: having a panel
of
respected
attorneys
interview
candidates,
review their records, and
make recommendations,”
the spokeswoman, Sara
Hottman, said in an email
on Tuesday. “Sen. Merkley
has communicated that to
the White House and to the
Judiciary Committee, and
has been clear he cannot
commit to signing off on
any nominees who don’t go
through that process.
“Sen. Merkley has a
call with the White House
counsel today,” she added.
“The call is the first time
in six months the adminis-
tration has reached out on
the subject of U.S. attorney
nominations, so it is not
accurate to blame ‘Demo-
cratic foot-dragging’ on the
delay in finding replace-
ments.”
A spokesman for Sen.
Ron Wyden, Oregon’s
ranking Democrat, echoed
that message. “Sen. Wyden
is working with Sen.
Merkley and Congressman
Walden on developing a
process that provides the
fairest and best opportunity
to forward good candidates
for these posts.”
The appeals court sits one
rung down from the U.S.
Supreme Court and holds
many of the same powers,
making rulings and setting
precedents that guide the
interpretation of federal laws
in states on the West Coast
as well as Arizona, Idaho,
Nevada, Hawaii, Montana
and Alaska. Oregon typi-
cally has two seats on the
29-judge circuit.
In such picks, connec-
tions often outweigh creden-
tials, politically active
lawyers say. But supporters
of Bounds say the Yale Law
School graduate has both.
“He’s got a keen grasp
of what the law is and
what the law says. ... He’s
a brilliant guy, but he’s not
an egghead,” said Kristian
Roggendorf, a local lawyer
and friend of Bounds who
heads the Oregon branch of
the Federalist Society.
If Trump does decide to
go with a more proven judge,
the other name that has
come up in speculation for
the Ninth Circuit appellate
post is Michael Mosman,
the former U.S. attorney for
Oregon and the state’s chief
federal judge.
Even defense lawyers,
typically a liberal bunch,
begrudgingly say Mosman is
a very good jurist. His fans,
however, say he’s great.
“He’s just a marvelous
judge ... nothing short of
unbelievable,” said former
federal prosecutor John
Deits. “He is the perfect
choice for that job. He’s just
amazingly smart, amazingly
experienced.”
Whoever is picked would
replace Appellate Judge
Diarmuid O’Scannlain, who
took senior status, essentially
semi-retirement, on Jan. 1.
He was considered among
the
most
conservative
judges on the Ninth Circuit,
and Bounds is expected to
follow in his footsteps, as a
devotee of the “originalist”
legal philosophy embraced
by late Supreme Court
Justice Antonin Scalia.
Mosman, nominated by
former President George W.
Bush, also is a conservative.
He has a reputation for
making government lawyers
prove their case, and is not
considered a purist.
Mosman and Bounds
declined to comment.
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