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Carolina Journal Radio No. 830: Sustainable budgeting key to recent N.C. success

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
April 15, 2019 8:00 am

Carolina Journal Radio No. 830: Sustainable budgeting key to recent N.C. success

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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April 15, 2019 8:00 am

North Carolina has been able to cut tax rates in recent years without having to slash state services. That’s thanks to sustainable budget practices. Joseph Coletti, John Locke Foundation senior fellow, outlines several key steps lawmakers have taken to pursue sustainable budgets. When Margaret Spellings wrapped up her tenure as president of the University of North Carolina System, she offered the Board of Governors a positive assessment of UNC’s current state. Shannon Watkins, policy associate at the James G. Martin Center for Academic Renewal, says Spellings and other university leaders might be viewing UNC through “rose-colored glasses.” Watkins explains why the actual picture isn’t as bright as Spellings suggested. State lawmakers deal with important issues. They also deal with ice cream. One bill moving through the General Assembly would designate ice cream as the state’s official frozen treat. North Carolina’s congressional election map headed back to the U.S. Supreme Court recently. You’ll hear highlights from oral arguments, including pointed questions from Supreme Court justices about partisan gerrymandering. Supporters of Medicaid expansion in North Carolina want to fund their proposal with a new tax on health care providers. Jordan Roberts, John Locke Foundation health policy analyst, analyzes the proposed tax and the problems it could create.

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From chair to current attack from the largest city to the smallest and from the statehouse into the schoolhouse Carolina Journal radio your weekly news magazine discussing North Carolina's most public policy events and issues welcome to Carolina Journal radio amateur coconut during the next hour, Donna Martinez and I will explore some major issues affecting our state. One watchdog says University of North Carolina leaders are looking at campuses across the state through rose colored glasses or what she means state lawmakers deal with plenty of important topics. They also deal with ice cream you'll hear the lighthearted debate about naming North Carolina's official frozen treat US Supreme Court justices are taking another look at North Carolina's congressional election maps you'll hear some of their questions about gerrymandering and you learn why Medicaid expansion in North Carolina would lead to a new tax on healthcare providers attacks the providers themselves don't seem to have a problem with those topics are just ahead. First, Donna Martinez joins us with the Carolina Journal headline North Carolina has reduced tax rates in four of the last six years while building its savings to the highest level in history savings to taxpayer since 2011 is estimated at roughly $15 billion because of North Carolina's success in our economic growth. Other states are now looking to North Carolina as a model. Joe Colletti is a senior fellow for the John Mott foundation. He studies the numbers intently.

He joins us now for a look at some of the keys to sustainable budgets and taxpayer relief.

Joe welcome back to the program be here an important note that you constantly drum into us here at the John Locke foundation is that North Carolina's success over the past few years is not just about tax reform and it's not just about restraint spending you say those two things together really the recipe for success. First part of of anything budget were related. Whether it's estate or your family is that you have to keep spending below what you have money coming in. And so for North Carolina that comes down to.

We have restrained spending over this time slower spending growth which allowed not just the tax reforms, but also some more opportunity to set aside money and the savings savings reserve account for the rainy day fund for the state and by doing those things. Not only does it help state government and prevent future tax increases. It also creates margin in the economy for the economic growth that we've seen and for the communities to kind of take care of themselves and for civil society to be able to expand because your first thought is not what is government can do to fix this problem so that's what sustainable budgeting is that it keeps government restrained and allows communities to succeed and and and not now and in the future, and families and will, and workers are keeping more of what they earn. So there's that individual impact of the past few years. Policy decisions and also you mentioned the rainy day fund.

Boy did that come in handy when unfortunately we were hit by several big time hurricanes so because of the restraint spending because the legislature had the commitment to low spending. Over these years they were in and set aside some of that in savings. There was $2 billion available last year when hurricane Florence came through and they were able to use $750 million.

About to take care of hurricane relief and recovery efforts that would not have been there otherwise not still so now the question of how do we rebuild that instead of what we do know Joe you have been talking to other think tanks and other elected officials around the country who are looking to North Carolina. They see what the numbers are.

They see that so many people want to move here because there's so much opportunity and they been saying to you.


How did North Carolina do it so you put together some key areas that you think I'm other states could follow to try to achieve the same type of result we talked about a couple of those that restrained spending and also that the tax reform, coupled together but one of the things that you say is that it's necessary to have a conservative revenue forecast. Tell me what role that plays in all this, legislators and governors like to spend money that they have their we all want to.

If we have money available. We look for how to respond right because there's the money burning a hole in your pocket right so a conservative revenue forecast, especially when you have a balanced budget requirement that is as strict as North Carolina's means that the legislature and the governor at the start of the year are start working from numbers that are going to hold that spending impulse and check for the last few years North Carolina's been averaging about 2% more revenue than had been forecast and whereas there are other states in the country, Kansas, Iowa and a few others where revenue forecast exceeded what they actually brought in at the end. And so mid in the middle of the year they had to go back and start making adjustments, we have not had to do that in the same way you mention something interesting and it's one of your key points to making sure that you can sustain your budget have taxpayer relief and beyond sound fiscal footing the strict balanced budget requirement tell us about North Carolina and how we differ from other states. So North Carolina's balanced-budget requirement required. Most states have something like it on their books, but usually it's about the Gov. has to propose a balanced budget legislature has to pass a balanced budget. But once the once the budget is enacted in most other states. The restraining factor how the government responds to lower revenues is very constrained and Iowa. There's only so much that the government can do they have to be across-the-board cuts in and you have to dip in the rainy days and then you have to been savings and Kansas.

The but the budget director is Sec. of administration are responsible for providing lower spending here it's on the governor and here it has to come from spending and there's no restraint on how much can be caught or where how the cuts have to be made. Gov. just tested at the end of the year, make sure that revenue has exceeded what we spent now what we see at the federal level only get into the whole budget situation is Samuel have one side saying that we want to spend X amount in here are priorities you get the other side of the political aisle saying no no no, we want to spend this much in our priorities are different seen these successive actions of the threats to close down the federal government does that happen in state government, or do we have something that prevents that that used to happen fairly often say government but in 2016 legislature passed something that says that if on July 1. The start of our fiscal year.

There is no budget bill that has been passed to the existing budget that's already in place.

It would been operating under for the past 12 months just continues on with some adjustment with some small adjustments but that means that we don't have a the threat of a government shutdown anymore.

The question is do we continue at the same level or two or do we come together legislature and legislators and Gov. come up with a new level. But there's not a zero and one choice. It is a it is a a level or higher level. Now you've talked a lot about spending and trying to restrain at that, but that's not the only thing that that we do with money when it comes to public money.

We also borrow money and time in your seven keys to sustainable budgets. Talk about debt limits.

And why is that important. One of the things that are the fastest growing part of the federal budget is the is is that payments and for many other states they've taken on debt and have adjusted how they take on debt and unsustainable way. And so we have some problems with unacknowledged obligations, unfunded obligations, but the practical debt that we have in North Carolina. The deck only goes to capital there is no borrowing to continue the operation spending which is a huge difference from many other states and the amount of debt that can be that can be taken out is limited to the debt service the payments for interest and principal are limited to 4% of the general fund and so when you say you can only borrow to this much amount.

It puts restrictions on not only the total amount that's borrowed. But what interest rate you borrow. And so that allows.

That means that as interest rates go up, there's less with availability tomorrow and that means that when you were not borrowing money, you're not having to spend money to pay off that last year spending you're just worried about what was spending this year. What is your around your number one recommendation to those folks said to try to keep things in line and and make sure that we continue what we seen in North Carolina that the biggest thing right now is is maintaining that commitment that had been demonstrated between 2011 2017 that Spending growth at about 2.6% in order to keep it sustainable. We have to keep that spending growth, low Joe Colletti Senior fellow for the John Locke foundation thanks Joe thinking the same with this much more Carolina journal radio to come in just a moment government plays a key role in your life affecting your paycheck the way you educate your kids the way you do business. How can you tell if government is doing a good job making the right choices.

Spending tax dollars wisely. Carolina tackles those questions every day. The John Locke foundation publishes Carolina journal in print each month and on the web each you'll find exclusive investigative reports on topics.

No one else is covering what else a rundown of the best new stories, editorials and opinion columns in North Carolina. John Hood's daily Journal new stories and important public and the voices of the newsmakers themselves.

Carolina journal radio and print on the air and on the web. You can find the information you welcome back to Carolina journal radio I Michiko guy are leaders of North Carolina's public university system looking at higher education through rose colored glasses. Recent column from the James G. Martin Center for academic renewal suggests the answer might be yes.

Consider policy associate Shannon Watkins wrote the column and she joined us down to discuss it. Welcome back to the program. This all stems from comments made at Margaret spellings last meeting as the president of the UNC system and she was talking about some of the good news pulling wise about what people think about higher education and that you mentioned the column that there are some survey results, save North Carolina North Carolinians. Do you have a high regard for higher rent is not right that is correct.

I believe the numbers were up in the 60s of North Carolinians who believe that higher education opens doors to job opportunities and even there are some in the 60s who also believe that more people should start going to college yesterday, and that spellings words sort of bucked the trend. There are some other places where that you might not have seen that much support as you see in North Carolina write her comments when along the lines of no we see confidence declining significantly in other parts of the country but these statistics in North Carolina to defy that trend your column those said yes this is true, but it doesn't tell the whole story. What else were you hoping that people would know what's the rigid call well so confidence in higher education in North Carolina could still be declining.

In fact, it's very well possible that it's declining in a similar rate to that of the national level, citing evidence that North Carolinians believe that economic prosperity is a result of higher education is not very countercultural as she might suggest there are also national trends of Republicans who believe that no higher education does open doors for economic opportunity, but that can still be true with declining confidence at the same time we are chatting with Shannon Watkins. She is a policy associate at the Martin Center for academic renewal and I found it interesting in your column that you did basically put out these these two competing narratives one that people see higher education is valuable, but at the same time, at least some groups of North Carolinians don't like the direction it's heading, or think it's getting worse.

We see both these happening at the same time I believe we didn't and I believe it can be even say a given individual could believe both of those propositions at the same time, one part you can believe that I I think that in order to get a good job.

I would have to get a college degree at the same time you can believe. I think higher education is causing our culture to go in a direction that I don't think it's very good. If you have both of those things in mind what to you.

Does that suggest about what the UNC system needs to do. Obviously if you listen to what present. Spelling said you're good to get the message that all were doing things well kinda continue on our current track. I would, I would think that based on what you wrote that perhaps your notion is you, not Outlook. It's this other data because it might point you in a different direction will exactly. And you know I will say that the data asking other questions about cultural issues, social political issues that occur in campus Gallup poll that I mentioned in the article that survey North Carolinians really look at those issues. So I think it would be interesting if a follow-up poll was conducted to measure.

No yes economic prosperity. On one hand, what they think about all these other issues do you think that the University system seems to be paying enough attention to those issues or is this the kind of thing that they have set aside while they focused on the economic but now I think that's correct. I think they've set it aside, and an annual measure confidence solely in terms of solely in economic terms, what kind of problems is that creative.

They're not paying attention to this cultural piece well hi for when there are issues that students voice about not feeling heard on campus because they have professors who bring in certain views into class and it feels somewhat intimidating to to speak or assist sometimes even right assignments that you think if I write this, and I don't know if I'll get a good grade or nine. These are important issues that students face and this whole issue of climate campus climate and the ability for people to speak their mind.

We've seen that play out in terms of things like speech codes and other prohibitions on people engaging in the free exchange of ideas.

How important is it for the University to get that right and not just make sure that they get people on a path to good job is essential.

You can't have a true deep education without having that exposure to to a variety and diversity of thought because that's what really will challenge students to think critically and deeply and for themselves that we mentioned this all started because of comments that Margaret spellings made during her last meeting is present so she's leaving, but obviously we have people who are in the University system, who will remain from her staff we have now. Dr. William Roper is the interim president of do you have a sense that others within the University system have a better grasp on those those two different ideas about higher education, or does this seem like a challenge or problem that goes throughout the woods to systems ministration. I'm afraid it does go throughout the UNC administration. Now I don't want to be pessimistic early on his doctor. Roper did just become president. So I am. I am hopeful that he'll take a closer look at more realistic look at these issues that I'm afraid. Time will tell.

Well, and certainly one avenue is Dr. Roper is the interim president. We don't know if he will be the new president of Bill hire someone else as that discussion is being had and the decisions are being reached.

Do you hope University leaders say the board of governors will be focusing attention on this type of issue absolutely, and we've seen the members of the board of governors have brought these issues in the past and and I definitely believe that there's lots of room for conversation to go forward in the future to think some members of the board really have this on their radar that they think the this is a problem they need to address in terms of diversity of thought absolutely yes and from the Martin Center's perspective what you hope that they will do as they're discussing this. What are some of the good things they could do moving forward moving forward. They could encourage more of the schools in the UNC system to adopt the Chicago principles UNC Chapel Hill did not recently. I a perv endorses the values of free speech goes a little bit beyond her in a different direction than that then fire does with their green and yellow and red light ratings where it doesn't just measure how universities doing but it strictly endorses the value of free speech.

I would guess that the work whatever step, the University takes you hoping that their lease good to keep this issue in front of them and not send it to the side as it seemed that they did with them.

Margaret spellings remarks exactly that stuff laid out we been speaking with Shannon Watkins. She is the policy associate with the James T Martin Center for academic renewal. Thank you for having love want Carolina journal radio just if you love freedom we got great news to share with you now. You can find the latest news, views, and research from conservative groups across North Carolina all in one place North Carolina it's one stop shopping for North Carolina's freedom movement and North Carolina You'll find links to John Locke foundation blogs on the days news Carol reporting and quick takes Carolina journal radio interviews TV interviews featuring CJ reporters and Locke foundation analysts, opinion pieces and reports on higher education from the James T Martin Center for academic renewal, commentary and polling data from the scimitar's Institute and news and views from the North Carolina family policy Council. That's right, all in one place North Carolina that's North Carolina spelled out North Carolina Try it today. North Carolina is changing not just day-to-day but outward to our minute to minute and 2nd to 2nd, how can you keep up with the changes, especially the ones that affect you, your family, your home, your job, make the John lot foundation and Carolina journal part of your social media diet on Facebook like the John Locke foundation like Carolina.

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The state's official frozen treat state representative John Torbert explains this effort started out as a group of fourth-graders I was attaining a Gaston County commission meeting and I got to hear the report writers approach the commission and ask permission for resolution to support a local ice cream vendor name. Tony's ice cream as as a state frozen treat and they said they would log users as their class project and eventually get it to the North Carolina Gen. assembly let good friends. My commission back home. The court pointed out that I was in the audience and that they could talk to me at that very night, at which case they spoke with us and we say would be happy to try to help them with their education and how their government works by offering this at the state level to be an official frozen treat. However, I did say since it is the state we would have to take out ponies this but very simply just say is that ice cream would be the state's official frozen treat knob and asked what flavors do I prefer will tell you very honestly but I'm just old school chocolate and vanilla, got on those rare weekends, very rare weekends.

I will go but up, colleagues like representative Hugh Blackwell had questions for Corbett.

Would there be any distinction made with respect to softserve is that considered frozen. It is my understanding that is considered frozen. Yes, what about gelato is that considered ice cream is a cream based sweeper is a water-based sweep. I'm not sure that's I'm asking you as to what is our intent.

Yet it is a cream base course, it would fit the description and in with the same thing apply to sorbets after SAARC sorbets are a water-based Rosenblatt so they would not actually fit if there's any claim in it at all that matter how much it would qualify longer had ice in front of that would be correct. Representative Greg Murphy is a physician viewed on a fiscal note on this to see what this will do to the health and welfare of certain people for long. Actually, the fiscal note required would be the impact would be on there is no notable impact on the bill other than simply just carried on the standard operating procedure.

Most North Carolina's time representative Carla Cunningham also had a health-related question know how many calories now I scream.

I like that. But if he can't, and you probably can tell it, but it's a lot of calories and that I sleep so we may have to look at a fiscal note for halfling thank you measure would need support from both the House and Senate to become law, will return with more Carolina journal radio in a moment where doubling down on freedom at Carolina journal radio were proud to bring you stories that impact your life and your wallet.

And now get twice as much freedom when you also listen to our podcast headlock available on iTunes headlock is a little bit different. It's a no holds barred discussion that challenges softheaded ideas from the left and the right light. Carolina journal radio headlock is smart and timely but with headlock you'll hear more about the culture wars get some more humor as well.

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Listen to Carolina journal radio each week and listen to headlock to remember, you can listen to head or subscriber download each week iTunes Carolina journal radio and headlock just what you need to stay informed and stay entertained both brought to you in the name of freedom by the John Locke foundation. Welcome back to Carolina journal radio on which coca North Carolina's congressional election maps are back before the US Supreme Court.

This time the justices will decide whether the Republican lead Gen. assembly used too much partisanship in drawing the maps.

Some justices are clearly skeptical, including Ruth Bader Ginsburg is one person have one vote count is included with the impact of her vote is reduced based on her party affiliation. The answer that question. Justice Ginsburg is yes, you still have an equal right to vote as an individual and with the parties on the other side are really complaining of here is not a purely individual injury with the complaining of is that there grouped in a district with either too many people who agree with them or too few people who agree with them, and therefore their vote is sort of deluded in some way and I don't think that is in the first place. In individual legally cognizable interest. So I think they have standing problem.

But even if they get over the standing problem that I don't think that's a justiciable injury and I would say more broadly lots and lots of voters live in a district where either because of geography or because of state action. They're not going to have their preferred candidate elected. Did I go further and say most Americans don't get their preferred candidate elected because they have to choose from the candidates or before almond may be based on the district they live in it tends to give them a relatively liberal Democrat were relatively conservative Republican.

When really what they prefer somebody down the middle and none of those things I think are things that your constitutionally entitled to. That's Paul Clement, the attorney representing North Carolina legislative leaders.

He also faced the challenge from Justice Sonja Soto Mayor that would mean has occurred here that almost 50% of one party's vote is the result may be less than one third of their representation in Congress. That's exactly right. Just the Soto Mayor and I think you put your finger on what my friends on the other side perceived to be the problem, which is a lack of proportional representation that no because all of the tests that they are proposing and that the District Court that didn't talk about proportionate representation. It looked that only the opportunity to elect an opportunity is different. The way this is structured. There is absolutely no opportunity to not none, but virtually none exaggerating slightly but but virtually none for maybe a majority party to elect more than over less than 1/3 of the people they voted for Justice Stephen Breyer says he wants to stop truly outrageous gerrymandering. What I'm trying to do is to figure out if there's a way to catch real outliers just can't go beyond the moment. I'm assuming real outliers. I've tried to figure out something simple like to get old. Every judge in the country mixed up not delete every election contested and protocol to judges instead of the people. Anybody can figure it out. This is what it is that if a gerrymander Is uncooperative.

If there is a set of commission or something. Forget it throughout a court right away. Okay, but if there is no commission. One party controls then a gerrymander is unconstitutional if a party that wins a majority of the votes in the states and they won a majority of the votes, but the other party. That's more than two thirds of the six that would be pretty extreme here listening to highlights from the US Supreme Court's recent oral arguments about gerrymandering. They focused on North Carolina's congressional election map. While some justices are inclined to address the issue. Others have serious questions Nucor such wonders whether the US Supreme Court needs to act. One of the arguments heard is that the court must act because nobody else can. As a practical set crew and to what extent have states through their initiatives, citizen initiatives, or at the ballot box elections through the legislatures amended their constitutions or otherwise provided for remedies in this area. I just happen to know my home state of Colorado this last November had such a referendum on the ballot the past overwhelmingly cervical so I believe there are others, and I'm just wondering what's the scope of the problem. Justice Samuel Alito wonders how he and his colleagues can determine how much partisanship is too much if you make a list of the so-called neutral criteria compactness contiguity protecting incumbents if that's really neutral. Respecting certain natural features of the geography and you have a computer program that includes all of those I'm wakes them all so all that is neutral and at the end what you get is a large number of maps that satisfy all those criteria. I think that's realistic that's what you will Then and the legislature chooses from among those maps. How do you determine whether that choice is unconstitutional. The real puzzle to me.

So you've got say that 100 maps or you might even have 25. I think you probably have thousands you have all of these maps and you have to choose among them that the legislature chooses among them, and you've already programmed in all of the so-called neutral criteria. How do you how this legislature go about choosing among those maps with anything other than just random choice visa for the satisfactory newest Justice Brett Cavanaugh could be the deciding vote it a question for Allison Briggs, attorney challenging the maps. I took some of your argument in the briefs amicus briefs to be that extreme partisan gerrymandering is a real problem for democracy, can dispute that that the court even though it might be a problem to get involved in all these cases should in essence recognize the emergency situation from your perspective. But what about to pick up on something just to score such that earlier there is a fair amount of activity going on in the states on redistricting and attention in Congress and in state Supreme Court. Some of the words that would reach the moment.

Even though it would be a really reach the moment you know would be a big lift for this court to get involved where the other actors can't do it North Carolina and plaintiffs in front of you can do nothing to solve this problem and something about more nationally your exposure.

Certainly referencing out a problem in many states the idea think in the braces of this court and this court alone can step in and there is a fair amount of activity going on in the states, recognizing the same problem that you're recognizing Paul Clement, the attorney representing the Gen. assembly reminded the justices that the issue of partisan gerrymandering is not new.

A lot of hard constitutional issues come before this court because you're dealing with something that was unknown to the framing generation. But the framing generation understood partisan gerrymandering firsthand.

James Madison was the intended target of a partisan gerrymander by Patrick Henry. He complained about it bitterly, so did George Washington. Neither of them contemplated suit. Hamilton actually suggested to John J that the Federalists ought to partisan leave gerrymander the electoral college for the 1800 presidential election. Dante said it wasn't such a good idea.

All three authors of the Federalist papers knew about this and didn't think there was a judicial solution you been listening to highlights from recent oral arguments of the US Supreme Court justices are considering whether to throw out North Carolina's congressional election map decision is expected in June will return with more Carolina journal radio in a moment a commitment to truth and transparency in government. That is the mission of Carolina journal and we are proud to deliver and now proud to tell you the North Carolina press Association has honored to members of our team with awards reporting and writing, that's right, we really do deliver award-winning journalism we shine the light on government spending, reveal the truth about boondoggles and dig deep into programs paid for with your tax money. We keep you in the know in a way other media outlets don't and are reach and influence are growing all of our outlets.

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Our monthly print edition arrives in your mailbox every month. Our online daily news site Carolina has fresh stories, opinion pieces, and more. The award-winning Carolina journal team I reporters make government accountable to you. Call 1866 JL F INF oh for your free subscription, welcome back to Carolina journal radio Donna Martinez, author and journalist Bob Woodward has written that former VP Joe Biden referred to the Medicaid provider tax is a scam. Now North Carolina Gov. Roy Cooper is hoping to use this financing to expand advocate in North Carolina to roughly half a million able-bodied childless adults.

John Locke foundation healthcare analyst Jordan Roberts has been looking into the Medicaid provider tax and why those very providers who would be taxed have been eager to support this Jordan joins us now talk about that Jordan. Welcome back to the show when we hear the discussion of Medicaid in the potential expansion of Medicaid in North Carolina.

A common refrain is well don't worry about in terms of money, because it is essentially free North Carolina. No not not really so the way it's going to work is that the expansion population will be paid for 90% by the federal government and the state is on the hook for a 10% share and to come up with that 10% share of the governor's proposed imposing taxes on premiums for the managed-care population and provider assessments which are basically a hospital tax to come up with that 10% share that hospital taxes that what is technically known as the Medicaid provider tax that's exactly right is either being the provider of the service exactly tell us how that actually works. When you say someone would be taxed down. How is that determined so the Medicaid program is funded jointly by the states and the federal government.

Like I said the expansion population would is paid for 9010 match following 2020 and so the way it works is to the status to put up funds and then the federal government reimburses a matches the percentage of those funds and so in order to generate new in-state funds. The Gen. assembly will impose taxes on providers that are participating and they will increase the amount of state funds that is eligible for a federal matching funds.

So in essence this is free to the state because there's no direct general fund spending but the federal government is the ones that there is the entity that's can end up bearing these costs so we have increased state funds through hospitals lower state spending and higher increase in the federal tax in the federal budget. Normally, if someone is about to be taxed and have a new tax put on them, whether an individual or company. You would think the first thing they would say is hey wait a second that's right extra cost to me. I don't want to be taxed. Why is this happening when you wrote about this set for the daily signal along with your John Locke foundation colleague Joe Colletti. He said that there is a specific reason why medical providers such as hospitals seem to embrace this idea of them being taxed. Tell us about that. Well, whether implicitly or explicitly, there is an arrangement that between the state and the hospitals that participated that they're going to receive additional payments and Medicaid so they be subs, not some providers not all, but they be substantially better off and the state would have a substantial more amount of federal money to spend on either Medicaid or other other estate services so they are essentially going to end up making more than their type essentially could and I you know that's where the there's been some federal oversight that have tried to limit this practice to try to keep hold payers horror hold providers harmless, but that they're trying to impose requirements that the providers aren't held harmless by the tax but often times with these agreements that enhanced medicated payments will generate some extra funding and you noticed the federal government is the one bearing the shift of costs. Gov. Cooper wants to try to expand Medicaid by about half a million people or so and he's got a lot of support to that, but there are those including you at the John Locke foundation say there's a much better way to go about trying to make sure that people have access to quality care will talk about that in a moment, but Jordan what is fascinating about this.

Medicaid provider taxes that you and Joe Colletti wrote that Congress is actually gotten involved over the years to try to end this practice and again, the former VP Joe Biden. At one point called it a scam tells about Congress's involvement right so the as we say in the piece. The basic tenet of Medicaid is that it's costs are shared by the federal and state government, and so the federal government views the states, using provider taxes, shifting the cost of the federal government is kind of awaits to review them, of all costs and that's not the way Medicaid is is funded so if were going to allow these providers to pay the tax to the state and around the federal government's make up these costs then you know that's a problem for the federal government and federal government has tried to limit this just like they limited the state and local income tax deduction, but it's used in a lot of states for the Medicaid program and outs can be tough to our rented and but if it if it were to be reined in.

There be substantial federal savings substantial federal budget savings. Let's talk more about this Medicaid expansion population has it's called. If Fed Gov. Cooper and his allies end up getting their way. About half a million more people would be added to the Medicaid rolls in North Carolina. I thought that the Medicaid program.

Jordan was about making sure that very fragile and vulnerable populations working had access to healthcare and health insurance. But as I understand it, and in your writings, the governors proposing adding able-bodied childless adults to do the Medicaid rolls.

Why, that's the population that is in this coverage gap, but you know the way we see it is that instead instead of the first thing is we know that healthcare costs are extremely high and a lot are unaffordable for a lot of people, but the way we see it is that instead of expanding a massive federal program that is substantial cost growth that we should look to the states to try to increase the supply of healthcare affordable supply of healthcare and lower the cost of insurance through some supply-side reforms that make it more affordable for everyone to to acquire and you know there's other arrangements that people can get high-quality healthcare and so we want to promote those those ideas rather than expand this government program and increase the state budget risk of cost overruns and if there is an economic downturn, we would have substantially more people on the Medicaid rolls in the state would have a hard time paying for all those entitlements. Jordan it's hard for me and I'm and I'm sure some of our listeners to understand why it is that there would be roughly half a million people in North Carolina able-bodied childless adults who don't still have access to affordable insurance and therefore access to quality care because I remember just a few years ago.

The affordable care act Obama care. I thought the reason that it ended up being adopted was and declared unconstitutional was because it was going to cover people who didn't have insurance so the way was set up, there is this coverage gap, but you know instead of expanding government funding for inflated healthcare prices. We should just strive to cover these people in different ways and try to lower the cost of care in the state we been talking with Jordan Roberts.

He is the healthcare policy analyst for the John Locke foundation. He and his colleague that Joe Colletti at the Locke foundation but fascinating piece for the daily signal about this issue of the Medicaid provider tax. You can read their work on this Also Carolina Thank you all the time we have for the show this week. Thank you for listening on behalf of my cohost Mitch. Okay I'm Donna Martinez. Join us again next week for another edition of Carolina Journal radio Carolina Journal radio is a program about the John Locke foundation to learn more about the John Locke foundation donations that support programs like Carolina Journal radio send email to development John Locke done call 1866 GLS info 1-866-553-4636 Carolina Journal radio is the John line foundation, Carolina's free-market maintaining and Carolina broadcasting system, Inc. all opinions expressed on this program are solely those of their labor plan for the station. For more information about the show or other programs and services of the foundation. John Locke.toll-free at 866 JL would like to thank our wonderful radio affiliates across Carolina and our sponsors. Carolina Journal radio. Thank you for listening.

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