Budget, Obamacare highlight legislative summit

COEUR d'ALENE - Congressman Raul Labrador opened the Coeur d'Alene Chamber of Commerce's legislative summit Tuesday with an update on the nation's budget showdown.

"We are going back to Congress because of what you have been seeing in the news," he said. "We are in the middle of a big budget battle."

The issue is a continuing resolution, which Congress has been operating from, instead of a budget, for the past six years.

"The problem with continuing resolutions is that you just give the executive branch a sum of money and they get to determine where they spend that money," Labrador said. "The good thing about the appropriation process is that we in the House and Senate get to decide where the money is spent."

Because the Senate has not been willing to pass a traditional appropriations budget, Labrador said, Congress has had to fund the federal government through continuing resolutions, which continually extends the last budget that was passed by Congress six years ago. But even then, determining spending priorities has been a difficult process, the congressman said.

"This year we had a set limit of how much money we are going to spend for fiscal year 2014, and what the House is trying to do is fund the entire government except for the implementation of Obamacare," he told the mix of roughly 70 business leaders and state legislators. "A lot of people maybe find that an esoteric, sort of weird fight to have, but as business people I think you understand what Obamacare can do to business right now."

The uncertainty is taking a toll on many businesses, he said. He just heard from a local business owner this week that they are cutting their staff back from 35 hours per week to 28 hours per week so they are not subject to Obamacare.

"We are trying to tell the president that you are already giving exemptions to some big businesses, and now we are just asking him to give a one-year extension to the rest of the American people," Labrador said. "We know that Obamacare is not ready for primetime."

He said states, including Idaho, are struggling with setting up insurance exchanges and other aspects of implementing the law, which is expected to open for enrollment on Oct. 1.

"My position would be to get completely rid of Obamacare," he said. "But I think it is a pretty middle of the road position to say, you know what, you are having trouble with the full implementation of Obamacare, so let's just go ahead and delay it for one year, so we can get a better handle on it next year."

He said they may not be able to get the whole thing defunded, but they are going to negotiate to get what they can during the discussion of the continuing resolution.

Labrador also fielded questions from the audience on issues such as Medicaid expansion, health savings accounts, elimination of catastrophic healthcare coverage, immigration, common core and executive orders.

The chamber's summit was also attended by members of the Idaho Chamber Alliance and the North Idaho Building Contractors Association.

After the federal update, chamber CEO Steve Wilson introduced some of the other issues facing the business community at the state level.

Larry Jeffres, executive director of the NIBCA, gave a pitch on a concept they have for a bill that tightens up connection and development capitalization fees.

The fees are designed to have growth help pay for the cost of growth.

He said there are two lawsuits pending in Idaho over sewer capitalization fees. He said cities and the building community need more clarity and guidance on that issue.

"I think it is great for both sides," Jeffres said. "Idaho Supreme Court cases have stated there needs to be a reasonable relationship between the fees charged and the benefit provided. I think that is the crux of the issue. That's where many of our misunderstandings occur."

Most cities are implementing the fees correctly, he said. But the home building community would like to see uniformity statewide.

"So it's not real complicated, that's our goal," he said. "This is what we are going to go after in this session."

Medicaid expansion was another hot topic. The state has an opportunity to revamp its Medicaid system and expand coverage to another 35,000 Idahoans.

Joyce Broadsword, a former state legislator who now serves as regional director of Idaho Department of Health and Welfare, gave a presentation on the governor's taskforce that recommended the expansion.

She said that when the State Health Insurance Exchange starts enrolling people in October there will be thousands of uninsured people funneled into Medicaid if they are eligible - whether Idaho decides to expand it or not.

"That means about 25,000 children, about 7,000 adults with children and about 3,000 to 4,000 adults without children will be eligible for Medicaid - currently," Broadsword said, adding most of these folks are getting their healthcare through hospital emergency rooms.

That puts pressure on the county's mandated indigent care system that is funded by local property taxes. Statewide, counties are spending at least $60 million a year on indigent care.

By expanding Medicaid, Broadsword said the federal government will cover the 100 percent of the cost of the expansion for the first three years and 90 percent of the costs after that. Currently, the federal government covers about 70 percent of the costs.

By expanding Medicaid, she said the state would realize a savings of $84.6 million over a 10-year period.

"You know, as a taxpayer, I have to disagree with the congressman. In my opinion, it is better for us to expand Medicaid and expand coverage to those people who need coverage," she said. "I am not supposed to have an opinion, but don't ask me to talk unless you want me to express my opinion."

Another big agenda item for the upcoming session is the local option sales tax. Idaho's Senate Assistant Majority Leader Chuck Winder, R-Boise, is going to back a bill this session based on a local option sales tax that has been used successfully in Oklahoma.

Winder video conferenced into the summit to explain the bill. He said it would differ from other attempts to codify that authority in Idaho because it is a "pay-as-you-go" tax, and it wouldn't allow cities or counties to borrow against the revenue generated.

That would get around constitutional limitations that would require a two-thirds majority vote to implement a local sales tax.

Under Winder's plan cities and counties would have the authority to propose a local option sales tax to fund local projects. They would have to identify a project, such as a jail, and put that project on the ballot during a general election, but it only would require a simple majority vote to pass.

Winder said the simple majority may get changed to a 60 percent majority vote, but it would still be easier to pass a local project at that threshold.

Kootenai County is one of two counties that has ever been able to use the current local option taxing authority, which requires the two-thirds majority approval.

Dave McDowell, Kootenai County finance director, said the tax was used in 2004 to expand the county jail. The half-cent sales tax increase generated enough revenue to pay for the $11.4 million jail in less than two years.

He said today the county could generate about $13.2 million in revenues with a half-cent sales tax.

"Having a save-to-spend program as it is proposed here would be greatly advantageous to the taxpayers," McDowell said. "One of the advantages we saw when we had the local option sales tax was that about 20 percent of dollars collected came from out of county resources, so we were able to leverage visitors who came from outside Kootenai County to help pay for those projects."

He said in the $13.2 million range, 20 percent would be approximately $2.6 million generated from sources outside the county.

Other issues that may arise this session are salary increases for higher education workers and other state employees, income tax reduction for individuals and corporations, transportation revenue, safe schools, and streamlined sales taxes.