Chemical Association sues over penny utility tax

The fiscal year wasn’t even a day old before the Louisiana Chemical Association filed a lawsuit challenging the constitutionality of one of the revenue raising measures passed last month. The Associated Press has details:

The lawsuit strikes at the temporary suspension of a 1 cent sales tax exemption on business utilities, a short-term tax increase expected to fall heaviest on chemical plants. The association is asking a state district judge in Baton Rouge to declare the legislation unconstitutional because it didn’t receive support from two-thirds of House lawmakers. House leaders ruled only a majority vote was needed to pass the measure. The lawsuit cites constitutional provisions that require a two-thirds vote to levy a new tax, increase an existing tax or repeal a tax exemption and that describe a law suspension requiring the same vote and procedures that were needed to enact the law. Beyond the two-thirds vote, the lawsuit also says the legislation improperly seeks to suspend only a portion of a tax law and is unconstitutionally vague. House Speaker Chuck Kleckley, R-Lake Charles, said his chamber’s lawyers advised him that a two-thirds vote wasn’t required to suspend a tax exemption and that the legislation was properly handled.

If a judge rules in favor of the Association, it would blow a $103 million hole in the budget and trigger cuts to higher education and health care. House Clerk Butch Speer, for one, isn’t worried. He was quoted by the Baton Rouge Business Report last month saying he “won’t break a sweat” to beat such a case. Speer says it takes the same number of votes to suspend a law as it took to pass it–which in this case would mean a majority vote, not two-thirds.

Louisiana to receive $6.8 billion in BP settlement

In breaking news Thursday morning, state officials from Louisiana, Mississippi, Alabama and Florida announced they had reached an $18.7 billion settlement with BP over the 2010 oil spill.  The Associated Press reports:

The settlement announcement comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties after millions of gallons of oil spewed into the Gulf. Individual states also were pursuing litigation. Most of those penalties were to be distributed among the states for environmental and economic restoration projects along the Gulf Coast. The settlement money will be used to resolve the Clean Water Act penalties; resolve natural resources damage claims; settle economic claims; and resolve economic damage claims of local governments, according to an outline filed in federal court Thursday morning.

A press release from Gov. Bobby Jindal said the settlement was the largest of its kind in American history. Louisiana will receive $6.8 billion as part of the deal, including $5 billion for environmental damages, $1 billion for economic damages, and $787 million for Clean Water Act penalties the state will receive as part of the RESTORE Act.

Louisiana Medicaid to stop subsidizing private insurance

The Louisiana Health Insurance Premium Payment (LaHIPP) is a little-known program that allows Medicaid to subsidize private insurance for certain patients when it is “cost-effective.” But the program is being discontinued on Dec. 1, meaning about 1,500 families will need to make other arrangements, reports Marsha Shuler of the Advocate:

LaHIPP provides help for a Medicaid-eligible member of a household to be covered by the family’s employer-sponsored private insurance policy. Most of the Medicaid-eligible individuals are developmentally disabled. Now, the families must decide what health care coverage arrangement they want for their Medicaid-eligible loved ones in the future. State Department of Health and Hospitals Secretary Kathy Kliebert said it used to be more cost-effective to pay for the private insurance of those who qualified and use Medicaid as a secondary payer. But that has changed because of the state’s private-insurance-based Bayou Health program, Kliebert said. Medicaid recipients select from among five companies. The companies are paid premiums to manage the Medicaid recipients’ care. “With the success of managed care, we don’t have that same cost-effectiveness,” Kliebert said. Elimination of the program is projected to produce a $3 million savings — eliminating the need for that amount in DHH cuts, she said.

The demise of LaHIPP comes with a bit of irony. Gov. Bobby Jindal has for years criticized Medicaid as an outdated and “broken” program, and touted private insurance as a far superior option. But the governor’s own Bayou Health program (i.e., Medicaid) seems to prove that Medicaid managed care can save money and produce good outcomes. Bayou Health could end up one of the governor’s key legacies, and the state should focus on extending its reach to low-income adults who are now stuck in an underperforming charity system.

If only there was some source of federal dollars to do such a thing…

Final bills signed by governor
It’s a wrap on the 2015 legislative session, as Gov. Jindal on Wednesday signed the last round of bills into law as the fiscal year started. The Advocate reports that in all the governor signed 469 bills and vetoed nine.

Note: The Daily Dime is taking a brief holiday hiatus. It will return on Tuesday. Have a safe Independence Day weekend.

Number of the Day

$6.8 billion – Amount Louisiana is expected to receive from a settlement with BP over the 2010 oil spill. The money is expected to be used for coastal restoration (Source: Governor’s office)