Republican gubernatorial candidate Dr. Bud Pierce released an outline of his budget priorities on Wednesday, promising to include money for the Medicaid expansion, but showing a human services budget that grows unrealistically at just 1.6 percent.
“It is very important to me to bring forward a budget -- this is an item for discussion,” Pierce said. “We are overall pleased to project a budget that lives without the Measure 97 tax increase.”
Pierce said Oregon will put up $328 million to pay its share of the Medicaid expansion in the next budget. The Department of Human Services is faced with rising costs to the Aging & People with Disabilities programs and the Developmental Disability programs as well as the underfunded child welfare system that has left foster kids at risk.
Oregon Health Authority Director Lynne Saxton asked for a $1.2 billion increase just in her agency’s budget, and her agency’s much more extensive budget proposal claims the Medicaid expansion will costs $771 million -- more than twice Pierce’s figure.
Yet Pierce’s outline increases state funds for human services from $4.93 billion to $5.01 billion for the biennium, a scant $40 million a year.
In an outside revenue section, Pierce is counting on receiving $400 million a year from the Centers for Medicare & Medicaid waiver, apparently to pay for the existing Oregon Health Plan.
But the additional money in the proposed Medicaid waiver is designed to pay for new innovations, particularly $250 million a year to make investments for the social determinants of health -- not maintaining the existing program. The state has asked for an additional $150 million a year to be drawn from the hospital assessment to continue reforms in the state’s hospitals so their priorities can move away from hospitalizing and treating people in emergency rooms.
Pierce’s outline goes into minimal detail on how he can hold the general fund budget increase for human services to just $40 million a year as DHS caseloads rise without turning away people. In his remarks to reporters, though, he highlighted that 17 percent of state government is dedicated to administration, and he once again compared the state’s 40,000 state worker payroll unfavorably to Indiana, a larger state with only 30,000 employees.
He said he would reduce the number of state employees to 25,000 through attrition as people retired or quit, and as an example of likely waste, he cited the Department of Energy, which with just 150 employees in the entire agency, has three human resources managers and three public relations flaks.
“We must find a way to unlock that 17 percent administration,” Pierce said.
Chris Pair, a spokesman for Gov. Kate Brown, the Democratic incumbent, panned Pierce’s budget outline in a brief statement: “His budget proposal is not only unrealistic, it's dangerous. His promises have gotten bigger and bigger over the last few weeks, but his plans to pay for them have gotten smaller and smaller.”
Brown strongly supports the union-backed corporate tax hike, Measure 97, which would provide $6 billion over the next two years by imposing a 2.5 percent tax on corporate revenues above $25 million. The state would be flush with money to pay for the Medicaid expansion, public schools, DHS and public pension shortfalls with those dollars coming into the general fund.
Pierce objected to how revenues could increase naturally 9.9 percent, from $19.4 billion to $21.2 billion from 2015-2017 to 2017-2019, without a tax increase, and yet state agencies have asked for budget increases exceeding 10 percent and Democratic pols have framed the situation so that agencies will need a 10 to 12 percent cut.
The Salem oncologist would increase general fund spending primarily on education, increasing the state school fund from $7.4 billion to $8.7 billion. He would also cut taxes, promising to lower marginal tax rates below $50,000 so anyone who pays Oregon income taxes will get a tax cut, but also lowering the top marginal tax rate from 9 to 8 percent, a cut that would indubitably help the wealthy more than anyone else. He would offset tax cuts for the rich by ending some of their tax deductions.
He also proposes increasing the amount of college loan interest that indebted young adults could use to lower their taxable income from $2,500 to $4,500.
Pierce had told reporters he’d release the budget online last week, but was delayed when a gaffe he made at a September debate about domestic violence sent his campaign “into crisis mode,” and his campaign spokeswoman quit in protest.
Chris can be reached at chris@thelundreport,org.
