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ISSUE 12.45
Nov. 08, 2013

RECENT ISSUES:
9/05 | 8/29 | 8/22 | 8/15

Index

News :
Medicaid expansion debates rage on
Photo :
Autumn barn, Williamsburg County
Legislative Agenda :
Education, aging meetings ahead
Radar Screen :
Showdown at the Retiree Ranch?
Palmetto Politics :
Two paths for education
Commentary :
What would Dr. Seuss say?
Spotlight :
The South Carolina Education Association
My Turn :
Measure would upset S.C.'s waste management balance
Feedback :
The media are to blame
Scorecard :
Race at the top to nullifiers, more
Megaphone :
For sale
Tally Sheet :
Search for S.C. legislative bills
Encyclopedia :
The Best Friend of Charleston

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NUMBER OF THE WEEK

336,000

That’s the number of South Carolinians who qualify for federal insurance subsidies, according to a new report. But what about the same number who get nothing because S.C. wouldn’t expand Medicaid? More.

MEGAPHONE

For sale

“The big corporations and the PACs dominate. They have an undue influence on who can afford to run. They have an undue influence on who gets elected. And they have an undue influence on legislation.

“It’s all implicit. Nobody is violating the Hobbs Act (a federal law outlawing extortion). It’s a political system that pays off the big corporations with huge incentive and tax breaks and free land. At the same time, their policies fail low-income children, women and teachers because they don’t have the money to buy the public policy.”

-- S.C. Common Cause’s John Crangle in a continuing story in The State about the influence of money in politics dubbed “State House for Sale.” More.

TALLY SHEET

Search for S.C. legislative bills

With the legislature adjourned until next year, it's easy to look at bills filed in 2013 to determine what's so far in the hopper for 2014.  Pre-filing of new bills for 2014 for House members and senators is December 3 and 10

ENCYCLOPEDIA

The Best Friend of Charleston

NOTE:  A replica of the Best Friend of Charleston returned to Charleston Sunday and will be on public display at a special museum being readied on John Street.  More Best Friend facts on The List.

Commissioned by the South Carolina Canal and Rail Road Company, the Best Friend of Charleston was the first locomotive built in the United States for public service. Constructed in New York City at the West Point Foundry to run on the Charleston-Hamburg line, the Best Friend was christened by hopeful supporters on its Charleston arrival in October 1830. The locomotive had its formal debut on Christmas Day 1830, pulling passenger cars from Charleston to Dorchester. Its performance exceeded expectations, with one observer writing that passengers "flew on the wings of the wind at the speed of fifteen to twenty miles per hour, annihilating time and space."

In 1831 the Best Friend was used to carry mail, freight, and passengers. A second engine, the West Point, went into use on the Charleston-Hamburg line in March 1831 but never achieved the same speeds as those of the Best Friend. The South Carolina Canal and Rail Road Company used slaves to work on the line, both as laborers and as firemen to regulate the steam engine. At one point the company even considered the use of black engineers to serve under the management of white conductors, although the suggestion seems to have been dropped.

In June 1831 an accident brought an end to the Best Friend. A slave fireman closed up a safety valve on the boiler while the locomotive was stopped at a platform. When the Best Friend began to move again, a terrible explosion threw the boiler twenty feet into the air, killing the fireman, scalding the engineer, and injuring several workers. The engine was rebuilt and rechristened the Phoenix.

-- Excerpted from the entry by W. Scott Poole. To read more about this or 2,000 other entries about South Carolina, check out The South Carolina Encyclopedia by USC Press. (Information used by permission.)

PALMETTO PRIORITIES

Palmetto Priorities Statehouse Report encourages state leaders to develop and implement Palmetto Priorities involving several issues to make the state better a better place. Click the link to learn more about our suggestions for bipartisan policy objectives.

Here is a summary of our Palmetto Priorities:

CORRECTIONS: Reduce the prison population by 25 percent by 2020.

EDUCATION: Cut the state's dropout rate in half by 2020.

ELECTIONS: Increase voter registration to 75 percent by 2015.

ENVIRONMENT: Adopt a state energy policy that requires energy producers to generate 20 percent of energy from renewable sources by 2020.

ETHICS: Overhaul state ethics laws.

HEALTH CARE: Ensure affordable and accessible health care.

JOBS: Develop a Cabinet-level post to add, retain 10,000 small business jobs per year.

POLITICS: Have a vigorous two- or multi-party political system of governance.

ROADS: Strengthen all bridges and upgrade state roads by 2015.

SAFETY: Cut the state's violent crime rate by one-third by 2016.

TAX REFORM: Remove outdated special interest sales tax exemptions as part of an overall reform of the state's tax structure to be completed by 2014.

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YOUR COMMENTARY SOUGHT

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News

Medicaid expansion debates rage on

State hospitals may be latest casualty

By Bill Davis, senior editor

Nov. 8, 2013 -- Obamacare and Medicaid expansion will either reap great rewards or great deficits for state hospitals, depending on who is reading a report from one of the nation’s “Big Three” credit ratings.

Fitch Ratings, little sister to the Moody’s and Standard and Poor’s credit agencies, released a report recently that could have major fiscal ramifications for hospitals in states like South Carolina, where governments have voted to not expand Medicaid programs in line with Obamacare. 

Fitch found, in part, that hospitals in states like South Carolina, which have higher than national average uninsured and poverty rates, could be hurt by higher levels of uncompensated care.

Moody’s was quoted in the report, saying that hospitals in states that didn’t expand Medicaid to receive massive federal matching dollars, could take a hit to their bottom lines and perhaps see a downgrading in their credit scores and profiles.      

With as much as $200 billion in federal matching dollars flowing to states that are willing to expand over the next decade, it seems that Fitch and other credit raters are taking the position that not getting as much federal matching money as other states, South Carolina’s hospitals could be relatively less attractive destinations for bonding -- and that could make it more expensive to borrow money and do business.

An intertwined stressor to the state’s hospitals involves special payments known as “disproportionate share” or “DSH funds” that they’ve received in the past to help pay for the costs of treating the uninsured. With Obamacare, those payments are being phased out and hospitals will have to make up the difference. Had Medicaid expansion been accepted here, the poor would have been able to get subsidized insurance to reimburse their treatment to the hospitals.

Cutting own throat

State Senate Democratic Caucus spokesman Phil Bailey said the report dove-tailed with what his members have been warning about: that refusing to expand federally-funded state Medicaid expansion as required by the Affordable Care Act will hurt the state in a myriad of ways.        

“We are going to lose in the number of jobs that could have been created by the expansion,” said Bailey of the initial 10-to-1 buy-in the state legislature declined this year to take part in. Observers said the conservative-led General Assembly will likely come around to expansion, but only once the federal money has dwindled.       

“Hospitals, if we’re not going to take the money, are going to get hurt,” said Bailey, son of a health care economist. “People will still be coming in, uninsured, to get treatment in the emergency room – the most expensive care in the hospital.”

“And guess what happens then?” said Bailey. “Hospitals will have to foot that bill and pass on the cost to the insured and we’re going to continue to see rates health care insurance rates higher than if we passed expanded Medicaid.” 

Allan Stalvey, spokesman for the S.C. Hospital Association, said the Fitch report “is basically common sense,” adding that the legislature kicked a leg from beneath state hospitals when it passed on taking the federal buy-in this session.

Stalvey did praise the legislature and Gov. Nikki Haley on two key points:

  • First, for setting aside tens of millions of dollars to help support struggling rural state hospitals.

  • And second, for not gouging the reimbursement rates for Medicaid – keeping cuts to them much lower than in other states, which has caused access problems in other states.

Not so fast, my friend

State Health and Human Services Director Tony Keck, an Obamacare foe who oversees the state’s current Medicaid program, sees a major hole in Stalvey’s and Bailey’s argument.

Their side has a major debate point it has to overcome, according to Keck, who has been charged dually by Haley to prepare for and block implementation of Obamacare.

“For years, all the hospitals said that for every Medicaid patient that comes through their doors, they lose money,” said Keck. “And now they say they need more Medicaid patients?”

Keck said their math, like their argument, doesn’t make sense. “How is it better that if a hospital loses one dollar a patient, then it’s better if they lose one dollar on 10,000 patients? That’s $10,000.”

Keck provided a “snapshot” of the state’s expansion market:

  • There are roughly 733,000 uninsured residents in the state.

  • About 433,000 of those are eligible for insurance on federal health care exchanges.

  • Approximately 160,000 of those eligible are already on state Medicaid rolls.

Keck said projections hold that approximately between 15 percent to 25 percent of those eligible for expansion would sign up in the first year with federal exchanges, as South Carolina has “opted out” of creating a state health care exchange. And about half that total number would sign up within three years.

That means, according to Keck, that there could be several hundred thousand additional residents with health insurance. But instead of being a boon to hospitals that desperately want them out of the ER, it could be crippling, as those signing up would tend, according to Keck, to be very sick and carrying potentially expensive pre-existing conditions.

Got votes?

Senate Labor, Commerce and Industry Chairman Thomas Alexander (R-Walhalla), who oversees the Medicaid expansion issue on the Finance Committee, said he sees “no reason” to change policy based on Fitch’s report.

Alexander said hospitals were getting loaned money before Obamacare on a case-by-case basis, and sees no reason why that would change, with or without more federal money.

Alexander said a more real world test needed to be applied to the report’s doom and gloom, like revisiting the issue in five years.

A spokesman for state Treasurer Curtis Loftis said this week that his office hasn’t heard anything about any of the report’s findings affecting the state’s bond rating.

Crystal ball: Observers may expect the legislature to eventually cave into expansion, but don’t expect it to be this coming year, which will be an election year. With the Tea Party continuing to flex its muscles in South Carolina, there likely won’t be much traction for a massive expansion of a state program via federal money, which will be cast as being an intrusion and coming with a variety of strings attached.

Bill Davis is editor of Statehouse Report.  He can be reached at:  billdavis@statehousereport.com
Photo

Autumn barn, Williamsburg County


 
Not only does the autumn sunlight dance warm shades and shadows on this old barn off McIntosh Road in Williamsburg County, S.C., but it highlights how the barn is in the autumn of its days, according to retired editor Linda W. Brown of Kingstree.  Such pastoral scenes dot the landscape of the Southern Crescent to reflect two realities — the relaxed beauty of the area and the slow decay of infrastructure that once powered the rural South.
Legislative Agenda

Education, aging meetings ahead

  • Education Oversight. The committee’s EIA and Improvement Mechanisms subcommittee will meet 10 a.m. Monday in Blatt 433. On the agenda:  New requests for EIA money and public comments. At 10 a.m. Nov. 18, the committee’s Academic Standards and Assessments subcommittee will meet in Blatt 433. On the agenda: Science standards, accountability.
  • Aging. The Joint Legislative Committee to Study Services, Programs and Facilities for Aging will meet 10:30 a.m. Wednesday in 308 Gressette to consider resolutions from the Silver-Haired Legislature.  
Radar Screen

Showdown at the Retiree Ranch?

The hiring of former state Sen. Greg Ryberg (R-Aiken) as chief operating officer of the state’s pension fund will likely change the tenor of its administration’s relationship with state Treasurer Curtis Loftis.

Loftis been extremely vocal in his criticisms of how the department has been run, especially of payouts to pension fund investment managers. But he may have met his match in Ryberg, a successful businessman with a hawk’s eye for budgets and who’s proven adept at charming a room and leading a charge.

That’s not to say Ryberg’s predecessors didn’t stand their ground against Loftis’ onslaught. But we know Ryberg, a steely-eyed sonofagun from Wisconsin. This should be good.

Palmetto Politics

Two paths for education

This week, state Superintendent of Education Mick Zais stood down on his push for eliminating class-size restrictions and statewide public schools received an improved annual report card.

Coincidence? Perhaps. But it seems that Zais was rebuffed enough by the education community at large to back off one of his proposed reforms – this from a former Army general not used to ceding ground.

Zais, pulling a flanking maneuver, has vowed to request the legislature to take up the issue in the coming session beginning in January. Zais has pushed for several “consumer-oriented” changes in public school – vouchers/tax credits, allowing students to attend schools in other districts, and expansion of the state’s charter school offerings.

It may be premature to think that the state’s civic duty of providing its residents a public education is over, judging by the pushback Zais received on this one.

Commentary

What would Dr. Seuss say?

By Andy Brack, editor and publisher

NOV. 8, 2013 -- In a restaurant here over coffee or a boardroom there where Perrier chills on a credenza, they smugly jeer, gibe, point and gesticulate.

At the committee hearings, self-important bigwigs full of smarm for C-SPAN and Fox point, gesticulate, gibe and jeer.

Of course, they’re talking about the Affordable Care Act and making the case that Obamacare is the worst thing since, say, Medicare or Social Security -- or maybe paper money and heavier-than-air flying machines, all of which they use or plan to tap.

And the Web site -- Lordy, the Web site that’s not working like it should. It’s got them so hot and bothered that the spittle at the corners of their mouths must be wiped thrice just moments after they twice hype a sanctimony that’s bought and paid for by plutocrats.

You’d think they would realize it makes no sense to get so worked up about the thing they don’t want to work anyway -- that by looking like cartoon characters with steam coming out of their ears,  they’re really showing how scared they are about this coming reality: the Web site soon will work and those now frustrated will start signing up in droves.

But day after day, America suffers from pure political theater fueled by billionaires’ millions who want nothing more than nothing done, save a status quo that keeps them near their gazillions.

And where’s South Carolina in all of this? At the back of the bus.

Because we have a governor and legislature hell-bent on not accepting billions in federal dollars to expand Medicaid, hundreds of thousands of our poorest are left behind, financially unable to access the health insurance because they live here. But over there in Kentucky and 24 other states, the poorest of the poor are finally getting some health insurance, which is expected to keep costs lower by trading expensive emergency care for preventive, primary care.

 "Oh, the Things You'll Miss!"
Again, the whole mess doesn’t make sense, especially when the same state officials salivate over taking federal money to finish an Interstate, save an unemployment fund or pay for disaster relief.

Instead of looking to lead to improve the overall health of the state, which should increase competitiveness and lower business costs down the road, South Carolina sits on its hands, looking for loopholes through inane exercises like trying to nullify federal laws, strategies that didn’t work 150 years ago. You’d think we would have learned our lesson in the Civil War.

Instead of working on ways to make sure hospitals are strong catalysts in rural communities, South Carolina opts for the path that adds more financial stress as health systems potentially will lose up to $200 billion over the next 10 years, according to one report. It doesn’t take a rocket scientist to comprehend that losing that much money will cause service reductions and facility closures. And our people: They’ll just get sicker and sicker.

What would Dr. Seuss wonder about South Carolina’s reaction to Obamacare? Perhaps, he’d pen a new book, “Oh, the Things You’ll Miss!”

Congratulations!
Now is your time.
You’re off of your rocker
And short lots of dimes.

You don’t use the brains in your head.
You ignore the tools in your shed.
You sing only one song
To steer us all wrong.

Oh, the things you’ll miss with blinders on!
There are people to help. There is policy fun.
And magical things can happen if you listen and try
to do the right thing and not let people die.

You can move mountains
If you simply choose.
You can change our state
If you try something new.

Just saying no isn’t always the best.
Leaders lead. (They aren’t just pests.)

Oh, the things you’ll miss.

Apologies to Dr. Seuss.  Andy Brack is publisher of Statehouse ReportYou can reach Brack at: brack@statehousereport.com.

Spotlight

The South Carolina Education Association

The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This week's spotlighted underwriter is The South Carolina Education Association (The SCEA), the professional association for educators in South Carolina. Educators from pre-K to 12th grade comprise The SCEA. The SCEA is the leading advocate for educational change in South Carolina. Educators in South Carolina look to The SCEA for assistance in every aspect of their professional life. From career planning as a student to retirement assessment as a career teacher, The SCEA offers assistance, guidance, and inspiration for educators.
My Turn

Measure would upset S.C.'s waste management balance

By Margaret C. Pope
Special to Statehouse Report

NOV. 8, 2013 -- On March 7, 1973, the Home Rule Amendments to the South Carolina Constitution became effective and with such passage, local government devolved from the Statehouse to the county seats and town halls — thus, the primary functions of government became local again.

No longer were counties solely and strictly limited to educational purposes; building and repairing public roads, buildings and bridges; maintaining and supporting prisoners; paying jurors, county officers and the costs of litigation, quarantines and courts; supporting paupers; and paying past indebtedness. With the ratification of present Article VIII to the South Carolina Constitution, powers granted local government by the General Assembly were to be broadly conceived and construed. The journey toward Home Rule after the deliberate and purposeful contraction of local power in the 1895 South Carolina Constitution, reflected our evolution as a state and the maturing of our political system. It also reflected the common sense proposition that decisions related to the provision of local services should be made at the local level.

Also during the 1970s, a variety of issues were identified relating to the disposition of solid waste which caught the attention of the federal Environmental Protection Agency. Solid waste disposal became a hot topic nationally and the question of what to do with all of it eventually reached the South Carolina Statehouse. Of particular concern to all involved, however, was that dealing with solid waste was going to be very expensive financially, and not dealing with it would exact great cost to the public health. The General Assembly, after many years and much debate, passed the Solid Waste Policy and Management Act of 1991 (SWPMA), and determined that county governments should be responsible for addressing the expense and health issues associated with solid waste. The SWPMA also set forth a number of provisions and suggestions for how they should go about it.

"Our legislature should carefully consider the effects of its actions before causing a self-induced injury to local finances. House Bill 3290 undermines Home Rule, displays political indifference to meeting obligations, and should not be enacted into law."
The various counties of our state dutifully responded by constructing landfills, assembling fleets of garbage trucks and entering into regional governmental agencies to achieve economies of scale. In many cases, counties engaged private waste haulers to perform all or a portion of these tasks under a franchise agreement.  In others they fended for themselves with coalitions of counties often issuing bonds to provide the necessary capital. Regardless of the approach, the ultimate responsibility under the SWPMA fell to the counties and the ongoing capital and operational costs associated with this responsibility was and is substantial.

The implicit legal underpinning to this entire regime rests on the ability of counties, pursuant to their Home Rule powers, to control the flow of solid waste within their borders. By ensuring a sufficient flow of solid waste to a county-provided or county-licensed facility, a county can rest assured that capital costs will be recovered and that the costs to the public will be kept reasonable. This so-called flow control power has been challenged and upheld by the South Carolina Supreme Court as a valid exercise of county Home Rule powers.

Currently pending in the South Carolina Senate is House Bill 3290 (it has already passed the House), which upsets the balance struck between the General Assembly and local government back in 1973. The “Business Freedom to Choose Act” amends the SWPMA to add language eliminating the Home Rule power of counties to control the flow of solid waste within their borders. This has the effect of endangering the revenue streams supporting county solid waste facilities—facilities constructed with public money on the basis of an understanding with the General Assembly.

This understanding also formed the basis of the understanding between counties and their bondholders that purchased solid waste revenue supported bonds. The new legislation, if adopted, removes the basis of that bargain and places county finances at risk. At a time when local government bonds and obligations are under the microscope due to events in Detroit, Jefferson County in Alabama and various cities in California, our legislature should carefully consider the effects of its actions before causing a self-induced injury to local finances. House Bill 3290 undermines Home Rule, displays political indifference to meeting obligations, and should not be enacted into law.

Margaret C. Pope, a partner with Pope Zeigler LLC in Columbia, is recognized as one of the leading bond attorneys and problem solvers for financing-related issues at all levels of South Carolina government. 

Feedback

The media are to blame

To the editor:

Ultra-conservative extremists, wing nuts? What did our president say about our being an exceptional country? [Brack, 10/18: Challenging American exceptionalism]

Let me tell you something my friend: It is not the politicians who make or break this country or make it less exceptional. I know that the American people are exceptional and therefore our country is. And there is nothing you and most of your colleagues write is going to change that. In fact, I believe that we need not only change the entire lot in Washington, but also the  media.

If you can't say anything positive, stay quiet and pray for inspiration.

God bless you. Of course, I am an ultra conservative Christian Wingnut.

-- Viktor Kappel, Charleston, S.C.

Send us your thoughts. We love hearing from our readers and encourage you to share your opinions.  But you've got to provide us with contact information so we can verify your letters. Letters to the editor are published weekly. We reserve the right to edit for length and clarity.We generally publish all comments about South Carolina politics or policy issues, unless they are libelous or unnecessarily inflammatory. One submission is allowed per month. Submission of a comment grants permission to us to reprint. Comments are limited to 250 words or less.  Please include your name and contact information.  Send your letters to:
Scorecard

Race at the top to nullifiers, more

Forest program. Federal officials are praising a pilot program in South Carolina that is keeping Southern forests in the hands of their black property owners. More.

Race at the top. It might be a good thing that there’s a battle, for the first time in years, for the top spot on the S.C. Supreme Court. More.

Report cards. The state Department of Education tells us that our state school report cards are getting better -- in spite of federal data that shows we don’t have much progress at all. Hmmm. Sounds a little fishy. More.

Zais. It’s good state Superintendent of Education Mick Zais backed down on a numbskull plan to increase class sizes, but you’ve got to question his judgment for even thinking about it. More.

Food stamps. Our leaders are making it tougher for people on food stamps to survive. What would Jesus say? More.

Nullifiers. State senators hoping against hope that they’ll be able to nullify Obamacare met in high-profile meetings around the state in purely political theater.  A couple of words to consider: Windmills, tilting. More.

Altman. Former state Rep. John Graham Altman (R-Charleston), who passed this week, is being remembered as a sometimes cantankerous but always quotable guy who was ahead of his time in more ways than one. Rest in peace. More.

Veronica lawyers. Baby Veronica is finally with her adoptive South Carolina parents. But lawyers are rubbing salt in the wounds of the biological man who tried to keep custody. Shame.

 

credits

Statehouse Report

Editor and Publisher: Andy Brack
Senior Editor: Bill Davis
Contributing Photographer: Michael Kaynard

Phone: 843.670.3996

© 2002 - 2014 , Statehouse Report LLC. Statehouse Report is published every Friday by Statehouse Report LLC, PO Box 22261, Charleston, SC 29413.
Excerpts from The South Carolina Encyclopedia are published with permission and copyrighted 2006 by the Humanities Council SC. Excerpts were edited by Walter Edgar and published by the University of South Carolina Press. Statehouse Report has partnered with USC Press to provide readers with this interesting weekly historical excerpt about the state. Republication is not allowed. For additional information about Statehouse Report, including information on underwriting, go to http://www.statehousereport.com/.