Medicaid Expansion, Road Funding Key Issues For Michigan Budget

While most of the state budget is expected to be passed soon, the top two issues — Medicaid expansion and road funding — remain unresolved.

Legislators have until Oct. 1 to get those issues hammered out.

Medicaid expansion is the No. 1 issue facing states in 2013 and the biggest connection to the implementation of Obamacare. The administration of President Barack Obama is pushing for the expansion and the federal government is offering hundreds of millions of dollars to states that are willing to expand the health care program. Gov. Rick Snyder wants the expansion, but so far, he hasn't been able to get the Legislature to go along with the idea.

The other top state issue is the $1.2 billion Gov. Snyder wants for road funding. It's generally believed only one plan has a chance of getting legislative approval. That plan would involve asking voters statewide to approve a proposal to increase the state's sales tax.

This week, Michigan Capitol Confidential asked a handful of Lansing political observers and strategists for their views on how some key issues likely will play out. As usual, the experts did not all agree. The following question and answer sheds light on the two issues:

The next fiscal year starts on Oct. 1. What are the odds that a Medicaid expansion bill that the federal government would accept would get passed by the Michigan legislature by then?

"I think it will get done, some way somehow," said Democratic political strategist, Robert Kolt, of Kolt Communications, "Opposition now is more political positioning than problem solving."

Dennis Darnoi, a Republican political consultant with Densar Consulting, said he doesn’t think a form of Medicaid expansion that meets the Obamacare criteria will pass.

"With a U.S. Supreme Court ruling that provides states with a legal rationale to decline adding individuals to the Medicaid rolls and a state Legislature that believes it has a better alternative than the Obamacare mandates, Michigan is likely to be among the 26 states that do not expand Medicaid coverage in 2014," Darnoi said. "Quite simply put, the odds are slim and none."

Inside Michigan Politics Editor Bill Ballenger had the same prediction.

"The chances are slim and none," Ballenger said.

But John Truscott, former press secretary for Gov. John Engler, now with the Truscott Rossman Group, said he thinks there's a chance Medicaid expansion will pass.

"I think the chances are better than 50-50," Truscott said. "It would probably have to be something like what Arkansas did, where they put more people into a private sector system — something along those lines. I think the Obama administration would go along with something like that because it desperately needs something it can call a win."

What are the odds that the legislature will get enough votes to place a sales tax increase proposal for road funding on a statewide ballot this year? If it happens, what are the odds of voters approving such a measure?

Truscott said he thinks the chances are 50-50.

He said he thinks the only way he could see the voters passing such a measure would be if they thought they were getting something in return.

"Passing a ballot proposal like that would be tough," Truscott said. "They'd need to offer some cuts somewhere else, or some other kind of trade-off. If they could do that, it would have a shot."

Kolt said he thinks the sales tax increase will be put on the ballot and the voters will pass it.

"I think it will happen, both approval in the legislature and a 'yes' vote on the ballot," Kolt said. "We are just way beyond the emergency timeline to fix roads and everyone knows it. A sales tax to invest in roads is a calculated investment, not something to be ashamed of. In fact, a few more pennies would be something to be proud of if the roads are improved. Everyone could say we did this together, which is kind of rare."

However, Darnoi said he doubts such a measure would get the legislative votes needed to place it on the ballot.

"It's unlikely that the votes will be there to place a sales tax increase proposal on the ballot this year, but one can certainly imagine the bombastic rhetoric on the floor of each chamber should that vote come to pass," Darnoi said. "The truth of the matter is that while most people complain about the conditions of Michigan roads, and while bridge failures like the one in Washington State heighten concern about the integrity of our infrastructure, there is no uniform agreement on how to pay for upgrading our roads and bridges. Absent that kind of consensus, meaningful legislative action is unlikely to occur."

Darnoi agreed that if a proposal to raise the sales tax were to be placed on the ballot, the chances of it passing would depend on the details.

"The odds of voters approving the measure will increase or decrease according to the benefits associated with passage," Darnoi said. "For example, if passing a road funding initiative meant increased funding for K-12 and/or reduced tuition at Michigan colleges and universities the likelihood of voter support would be higher than if the benefit was increased revenue for local municipalities."

Ballenger put the odds of the Legislature putting a sales tax increase proposal on the ballot as "even."

"It depends on what the actual ballot question is," Ballenger said.

Do you expect right-to-work to be a top-tier issue in 2014?

Ballenger said he doesn't think right-to-work will be a prominent issue.

"Certainly it will be a huge issue for union bosses, but unless they dump a huge amount of money into it I think even they'll end up saying, 'We've got to move on. The public really isn't with us (the unions) on this as much as we thought, and we've got bigger fish to fry.' "

Truscott agreed.

"I think the union bosses will try to make an issue out of it," Truscott said. "But, no, I don't think it will be a major issue. To put it bluntly, that ship has sailed. After people start seeing all of the job openings, that issue will be taken care of."

Kolt said he doesn't see right-to-work as a top 2014 issue either.

"No, I think it's over," Kolt said. "Labor will have a very long memory and be sore about it, but they would have to make a persuadable case for change, and it's just not that important of an issue now to most people. Some people say labor did it to themselves with the failed ballot initiative, and there is a lot of truth to that statement.”

Darnoi said the political dynamics just don't point to right-to-work playing a major role in next year's election.

"As a general campaign issue, the issue of right-to-work will not be a deciding factor," Darnoi said. "Regardless of the partisan rhetoric, the fact remains that with the exception of union households, who are presumably already in Mark Schauer’s (the presumptive Democratic nominee for governor) camp, a bare majority of Michigan voters support the law.

"Furthermore, support for the law, as is the case with opposition to the law, is not ambivalent," Darnoi continued. "Both sides of the debate enjoy strong support for their position, meaning there are very few voters open to changing their mind. As a means of solidifying a base of support, Snyder and Schauer talking about right-to-work is a winning strategy. However, in terms of using the issue to convince general election voters to elect either one of them governor, its importance is overstated."

Could it actually help Gov. Rick Snyder with the conservative base if he does not get Medicaid expansion or the $1.2 billion for road funding? In other words, are politicians less likely to pay a political price for taking a position when it ends up having little or no policy impact?

"The conservative base loathes Obamacare, in all of its facets," Darnoi said. "By actively endorsing a component of Obamacare, Gov. Snyder provided the conservative base with another reason to view him with suspicion and derision. Conversely, a sizable majority of Democrats and Independents support accepting new federal dollars for Medicaid funding. Thus, in terms of appealing to voters he will need to win the general election, Gov. Snyder’s inability to successfully negotiate the legislative process makes him seem weak and ineffective.

"In the case of Medicaid expansion, Gov. Snyder’s endorsement of, and failure to get legislative buy-in of his proposal, represents a net loss," Darnoi continued. "On the issue of increased funding for infrastructure and road repair, the governor is unlikely to pay a political price. Widely panned in a YouTube video as the 'birthday tax,' his proposal to increase registration fees as well as recalibrate the sales tax was pretty much dead on arrival. Yet, he can rightly say that his proposals were conversation starters and not meant to be viewed as the sole solution."

Ballenger said he thinks that failing to pass Medicaid expansion would tend to diminish the negative fallout Gov. Snyder will have to deal with over his support of the expansion.

"It will certainly help Snyder with the conservative base if he does not get Medicaid expansion, unless he appears to have fought 'too hard' for it before losing," Ballenger said. "Road funding is a wash. I think a lot of conservatives really want something to happen on roads. They just don't like the proposals on how it should be paid for."

Truscott agreed, but only to a degree.

"It would probably lessen the impact," Truscott said. "However, I'm not sure how wide the opposition actually is or how many people are really familiar with that issue. I don't think very many people will actually end up basing their votes on it. As regards to the general election in 2014, the choice will be between Gov. Snyder and someone who is far to the left of him.

"Generally, conservatives, liberals and those in between tend to grade governors on what they accomplish," Truscott added. "In the end, I really don't think Gov. Snyder would benefit politically from failing to get his proposals passed."

Kolt said he does not think passing or not passing Medicaid expansion should impact Gov. Snyder's standing with conservatives.

"Few people understand the Medicaid expansion issue and it's difficult to explain," Kolt said. "A lot of people with aging parents or relatives know someone who has been, or is, a Medicaid recipient, so it's not an evil thing even for Republicans. Poverty is a situation, not a political evil. There is simply little or no real impact to politicians, it's more a money-budget issue."