The state Senate’s leading Democrat on Wednesday praised Gov. Mike Parson’s signal that he won’t call a special session to renew medical provider taxes that fund Medicaid without assurances a bill would pass.
The taxes, which are expected to provide $2.6 billion to fund Medicaid in the coming fiscal year, will expire Sept. 30. The last roll call vote in the Senate in this year’s regular session – at 3 a.m. on May 14 – was on the taxes. That 14-16 vote defeated the last-gasp attempt to pass an extension without provisions limiting access to contraceptives or barring Planned Parenthood from providing Medicaid-paid services.
The vote left the Senate in disarray, with Democrats distrustful of Republicans and the GOP caucus of 24 so split that a key player in the fight, Sen. Paul Wieland of Imperial, called last week for his colleagues to depose the chamber’s leaders.
The tax, called the federal reimbursement allowance or FRA, was first enacted in 1992 and extended 16 times without interruption until this year’s legislative failure.
“Before we can even begin to have the discussion about FRA or Medicaid expansion or anything, there has to be serious fence mending in the Senate,” Senate Minority Leader John Rizzo said. “There has to be a basic level of understanding on how we are going to move forward after the last week of session.”
In an interview last week with Missourinet, Parson said there is “no guarantee” he will call a special session to extend the tax. Instead, he told the statewide radio news network he would use his power to restrict spending to keep the budget in balance.
Parson said he wanted to see progress, with “the people that are really involved in this, to come to me and tell me they’ve got a plan in place and they’re going to get it passed. Short of that, we’re not calling a special session.”
Parson could have called lawmakers back as soon as they adjourned, as former Gov. Mel Carnahan did in 1997 over budget issues, because the provider taxes are essential to a functioning Medicaid program.
“I will give credit to the governor for not putting us in a position like that,” Rizzo said. “Kudos to him for understanding the situation.”
Delay does threaten a smooth renewal. If an extension is not passed by July 4, it cannot take effect Oct. 1 without an emergency clause allowing it to become law immediately upon Parson’s signature. Without the emergency clause, the bill would become effective 90 days after a special session ended.
An emergency clause takes a two-thirds vote in each chamber instead of the majorities needed to pass bills.
There are discussions underway on how to get the taxes extended, Senate Appropriations Committee Chairman Dan Hegeman, R-Cosby, said Thursday.
“We are just visiting with folks and trying to find a path forward,” Hegeman said. “I am working with (House Budget Committee Chairman) Cody Smith and seeing what all the players will be agreeable upon.”
The largest portion of the provider taxes, $1.8 billion of the total, come from hospitals. Resolving the issues before Sept. 30 is up to lawmakers, Dave Dillon, spokesman for the Missouri Hospital Association, wrote in an email.
“I am not aware of any solution we could provide to create a bridge,” he wrote. “When the FRA expires, it expires.”
The outlook is unclear, Dillon wrote, especially with Parson demanding that lawmakers show they have a bill that will pass without delay.
“I can’t anticipate what might happen — between today and September — other than the fact there will be significant pressure to resolve the issue within state government and among other stakeholders,” Dillon wrote. “That would include health care providers and provider-tax partners, but also the public.”
Parson’s reluctance to call a special session could be related to his disappointments in two special sessions held in 2020. The first, which ran for 49 days, passed only two of the seven items on Parson’s agenda. The second, which ran for 41 days, passed the spending bill sought by Parson but was unable to agree on a bill to shield businesses from lawsuits stemming from the COVID-19 pandemic.
Under the Missouri Constitution, a special session called by the governor can last 60 days. The shortest period it takes to pass a bill under the constitution is five days.
By leaving the deal-making to lawmakers, Parson is continuing the pattern he established on the FRA renewal during the legislative session. He left Jefferson City for events in Morgan County more than 12 hours before the climactic Senate vote and went to his home in Bolivar rather than return to the Capitol.
Parson’s office is being informed on any progress in the discussions but is not pushing them to reach a conclusion by any set date, Hegeman said.
Parson’s insistence that lawmakers solve the issue comes despite dire warnings about the long-term impact of failure to extend the taxes.
The state’s interim Medicaid director, Kirk Matthews, said recently that if the tax isn’t extended the “existence of the (Medicaid) program will be threatened by the end of the year.”
“I cannot overstate the impact,” Matthews said.
This is the first time the provider taxes have become embroiled in abortion politics. Wieland wants to prevent the state from paying for commonly used contraceptives intended to prevent fertilization that, in rare instances when fertilization occurs, prevent the ovum from becoming implanted in the uterus.
The provisions targeting Planned Parenthood, proposed by Sen. Bob Onder, R-Lake St. Louis, are intended to restrict the state’s approved provider list by banning any organization that has affiliates that perform abortions.
Missouri law since 1986 has prohibited the use of public funds to pay for abortions except to save the life of the mother. A federal restriction, known as the Hyde Amendment, could be repealed this year if President Joe Biden’s budget is approved.
The provider taxes aren’t the only issue where Parson is resisting pressure to call a special session. There are lawmakers who want to bar public schools from teaching a view of race relations called critical race theory, change Missouri election laws and limit how local governments can alter police budgets.
On Wednesday, a new call emerged with lawmakers who lead agriculture policy committees signing on to a letter from state Rep. Don Rone, R-Portageville, asking Parson to include rural issues in a special session.
At a news conference Wednesday in St. Louis, Rep. Nick Schroer, R-O’Fallon, again asked Parson to call lawmakers into session to ban cuts in police budgets. Schroer, along with 34 other Republicans, sent a letter to Parson last week asking him to call a special session to enact the provisions sought by Wieland and Onder
With no special session in sight and Parson expected to withhold funds, Schroer was asked if it creates the danger of state cuts to public safety agencies.
He said that he doubts there will be long-lasting impact of the delay in passing an extension.
“Well, I think that the FRA ultimately will be renewed,” Schroer said.
Rep. Peter Merideth, the ranking Democrat on the House Budget Committee, said he isn’t as optimistic that the issues can be resolved.
“They have, all along, dismissed the idea that we wouldn’t get it done,” Meredith said. “That did not stop us from not getting it done”
And the hole of more than $2 billion it would make in the budget doesn’t seem to be a big enough problem to set the bickering aside, Merideth said. There are no negotiations going on that he is aware of, he said.
“Where they are at, no one trusts the Senate leadership and no one trusts House leaders, and that includes the governor,” Merideth said. “It makes it hard for them to negotiate.
“If there were any more metaphorical gun to our head than not passing FRA, I don’t know what it is.”