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PEEHIP Faces Massive Shortfall

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The Patient Protection and Affordable Care Act (PPACA) of 2010, popularly referred to as “Obamacare” is changing much of what we know about the health care insurance industry and there are both winners and losers with the landmark health insurance reform legislation.  One of the losers is the State of Alabama where increasing costs of insurance combined with medical inflation (particularly in drug costs) and early retirements by teachers and education employees leading to an increasing number of educators, retired educators and dependents on the plan means that the Public Employees Health Insurance Plan (PEEHIP) is facing a projected $220+ million shortfall in the 2014/2015 budget year which goes into effect on October 1.

According to original reporting by “The Alabama School Journal” the Chief Counsel of the Retirement Systems of Alabama, Leura Canary, estimates that $65 to $75 million of that shortfall is directly related to the PPACA, Obamacare.  Canary expects costs to rise about 11% next year.

Obamacare affected PEEHIP in several ways: the PPACA eliminated the $one million lifetime limit on PEEHIP insurance coverage now PEEHIP’s liability is unlimited.  It also eliminated pre-existing conditions for dependents under 19.  Previously there was a 270 waiting period before PEEHIP would pay for a preexisting condition for new enrollees.  Free preventive care for seniors, more coverage in the donut hole for seniors, allowing young adults to stay on the plan until they turn 26, free preventive care (like colonoscopies and mammagrams) without a deductible all mean greater costs for the PEEHIP program.

There are three ways to deal with the shortfall: the State can contribute more money to the plan; the teachers can pay more for their insurance in higher premiums, copays, and deductibles; or the shortfall can come from the PEEHIP Retiree Reserve Fund.

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The Executive Secretary of the Alabama Education Association, Henry Mabry, favors (if the State legislature does not fully fund PEEHIP) taking the money from the PEEHIP Retiree Reserve Fund.  The law allows PEEHIP to take up to 10% of the reserve in any fiscal year.  The fund currently has a $1.15 billion balance.

Some in the RSA have reportedly suggested that this is not possible due to requirements under the Rolling Reserve Act, which Secretary Mabry says is false. Mabry said in the Alabama School Journal, “I know how I would vote if I was still a member of the PEEHIP board.  I would move to take money from the PEEHIP Retirement Trust Reserve to protect our beleaguered educators by not taking more money from their pockets.”  The Republican Super-Majority removed the AEA Executive Secretary from the Board during the 2013 legislative session.  Previously the AEA Executive Secretary held an official post on the board.

If the PEEHIP shortfall is passed on to the education employees and retirees then it will mean an average increase in out of pocket costs of $750 per educator and retiree, eating up much of the 2% raise which teachers and education support personnel received in the 2013/2014 budget.  The retirees did not get any raise in the current budget year and have seen their pensions stagnate over the last five years.

PEEHIP has been level funded for the last three years saving the state $118.8 million  year in what the state contributes towards teacher and state employees’ healthcare benefits.  After the legislature determines how much money to allocate to PEEHIP for the next fiscal year, the TRS/PEEHIP Board of Control will meet in May to determine how to address the remaining shortfall.

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Elections

Activist calls for Attorney General Steve Marshall to be decertified or impeached

Bill Britt

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Across the state, lawyers, politicos and candidates are questioning how to deal with the dark money that flowed into the Republican Attorney General’s primary race.

North Alabama Republican activist Thomas J. Scovill is calling for Speaker Mac McCutcheon and the ALGOP steering committee to deny Republican primary winner—appointed Attorney General Steve Marshall—certification because of funds he received from the Republican Attorney Generals Association.

“As Steve Marshall’s campaign finance issue drags on, the embarrassment to Alabama government and the Alabama Republican Party (ALGOP) is growing,” Scovill wrote, McCutcheon. “Just as the Alabama Republican Party acted quickly and decisively on the issue of PSC candidate James Bonner’s decorum, now is the time to act decisively on the much more serious issue of lawbreaking by our attorney general.”

At issue is Marshall’s acceptance of $735,000 from RAGA’s 527 nonprofit organizations which Scovill and many others believe is a clear violation of Alabama’s Fair Campaign Practice Act. The state’s Republican legislative supermajority outlawed PAC-to-PAC transfers as part of its reform measures in 2010.

Marshall claims the donations are legal because of a loophole in state law. He also argues that federal law trumps state law in this instance.

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Scovill in his letter to Mac McCutcheon and a petition to ALGOP Chair Terry Lathan says Marshall’s claim is not only misleading but wrong.

“The question of federal jurisdiction raised by Marshall is a red herring,” says Scovill. “When it comes to campaign finance, those who play in federal elections have to comply with federal law, and those who play in Alabama elections have to comply with Alabama law. Those who play in both have to comply with both.”

A thorny advocate for campaign finance transparency, Scovill has fought and won several battles against those who tried to skirt the state’s FCPA.

During the primary election, Scovill backed outsider Chess Bedsole in the Republican Attorney General’s contest. In the runoff, he supported Marshall until he discovered the RAGA contributions.

“My choice for attorney general was Chess Bedsole,” said Scovill. “And just after the primary, I endorsed Steve Marshall, but then when I got back from a two week trip to Colorado on the Thursday before the runoff, I got caught up in all this PAC to PAC and 527 stuff and said, ‘Oh gee, I should have put some time into this back in February.’”

Marshall won the Republican nomination for Attorney General against Troy King who made the same accusation as Scovill. Montgomery County Judge James Anderson dismissed King’s partition to force Marshall to stop using RAGA funds, but that doesn’t mean the matter is settled.

Several legal minds say that Judge Anderson was wrong in his ruling. There are also those who want the issue decided before Marshall’s exception becomes a rule that opens the floodgates for out-of-state PACs to flood the state with dark money from hidden sources.

“Even with a preliminary review by the Alabama Ethics Commission, this controversy cannot be adjudicated through the office of the Alabama Attorney General for obvious reasons – Marshall is the incumbent attorney general,” writes Scovill. “With his nomination by the ALGOP pending, we are out of time for legal quibbles, alibis, and antics.”

In both his letter to Speaker McCutcheon and ALGOP, Scovill references PSC candidate James “Jim” Bonner who the Republican Party disqualified shortly before the primary.

As APR‘s Brandon Moseley reported in June, “Numerous voices in the party have expressed their concerns that Bonner being on the ticket could be an embarrassment that could turn out Democrats jeopardizing and drag down other races up and down the ticket.” The Alabama Republican Party Candidate Committee voted not to certify election results for Bonner even though he was already on the printed ballots. At the time, ALGOP Chair Lathan said, “When our state party chooses to take these steps, it is a serious and rare occurrence. We strongly believe that this is one of those solemn moments. This vote was carefully considered and was not taken lightly.”

Alabama Republican Party will not certify Bonner

Scovill contends the Republican committee must do the same with Marshall. “Marshall is embarrassing the Alabama Republican Party by violating both the spirit and letter of Alabama law,” wrote Scovill. “Republicans are responsible for pressing for enforcement of the law, enforcement which includes impeaching Attorney General Marshall if necessary. Ignoring the issue will create a major controversy Democrats will exploit in the coming general election to the detriment of every Republican on the ballot.”

In August, the State’s Ethics Commission will likely weigh-in on Scovill’s question — finding that RAGA’s actions were unlawful, but it’s the Republican Party that will ultimately have final say on if the PAC-to-PAC transfer ban applies to Democrats and Republicans alike.

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Group organizes to fight Muscle Shoals tax increase

Brandon Moseley

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A new Political Action Committee has launched in Muscle Shoals to oppose property tax increase.

The group opposes a 67 percent increase in the City’s Special Municipal property tax. The tax increase will be voted on by city voters on August 28th.

Stop the Home Tax PAC was recently launched to oppose the proposed 5-mil property tax increase in Muscle Shoals. The vote is being held at the request of the City School Board.

The opponents of the tax increase argue that it would represent a 67 percent increase in the current city-level special property tax for the school board. Opponents argue that a five mill increase would make Muscle Shoals one of the highest taxed municipalities in the region. Muscle Shoals would be at 21-mils, Tuscumbia 13.5 mils, Leighton 11 mils, Cherokee 11 mils, Littleville 11 mils, and Sheffield would be 10 mils.

“We have a number of concerns about this tax increase,” said Carlos Berry, the Chairman of Stop the Home Tax PAC. “Not only will this tax increase place a huge burden on our home owners, but it will hurt our and renters and small business owners as well. Homeowners will see their annual taxes increase, and many renters will likely see their costs increase over the next few years as the property owners struggle to adapt to the higher rates. It is simply impossible to raise the special property tax rate by 67% and not see rates increase.”

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Carlos Berry is a former business owner and former elected Colbert County Board of Education member who lives in Muscle Shoals. He has grandkids in the school system and a daughter who teaches there as well.

“I support public education 100%”, Berry said. “What I can’t support is raising taxes to unreasonable levels due to irresponsible financial decisions being made by the school board. As a former school board member, I know how to prioritize spending on capital improvement projects and ongoing operational costs so that government lives within its means just like the voters have to do.”

Scott Hunter, who is helping with the effort as well, expressed his concerns that most voters will not turnout in late August,

“Tax increase votes are often held using special elections at odd times, with the sponsors counting on low awareness and turnout to get the vote passed,” Hunter said. “Basically, if they can get their friends to show up and vote, the tax usually sails through unnoticed by the majority of voters.”

The Stop The Home Tax PAC say that they intend to raise awareness about the upcoming election in order to make sure that the voters of Muscle Shoals have an opportunity to have their voices heard on this important issue. In addition, STHTPAC will be advocating for voters to reject the tax increase and protect the small business owners, homeowners, and renters in Colbert County.

School officials claim that they need more money to fund capital improvements.

City of Muscle Shoals voters go to the polls on August 28.

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National

Mo Brooks, Gary Palmer Win FreedomFighter Award

Brandon Moseley

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Tuesday, Congressmen Mo Brooks (R-Huntsville) and Gary Palmer (R-Hoover) were two of only 31 members of the U.S. House of Representatives awarded the prestigious 2017 FreedomFighter Award by FreedomWorks.

FreedomWorks is a leading conservative organization with more than six million members nationwide.
Only members of Congress who score better than 90 on the FreedomWorks scorecard receive the FreedomFighter Award.

Congressman Brooks’ FreedomWorks score was in the top four percent of all Congressmen in 2017.

Rep. Brooks said, “FreedomWorks is a leading organization in the conservative movement. I thank them for their work keeping members of Congress accountable and scoring key House floor votes which helps the American people better understand the impact of those votes. I was proud to receive the prestigious FreedomWorks 2017 FreedomFighter Award for my voting record in 2017.”

Congressman Palmer said, “I was honored to receive the Freedom Fighter Award this week from FreedomWorks.”

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FreedomWorks President, Adam Brandon, said, “The recipients of the FreedomFighter Award showed a commitment in 2017 to pro-growth economic policies and constitutionally limited government. We’re proud to recognize these senators and representatives. Our work is still cut out for us. Now that we have reduced some regulations and passed a historic tax reform bill, we must continue to pressure Congress to reduce spending to ensure that the prosperity we are seeing now is lasts into the future.”

FreedomWorks Vice President of Legislative Affairs, Jason Pye, said, “The winners of the 2017 FreedomFighter Award deserve applause. These members take tough votes, often going against the leadership of their own party, because they want to do what is right by taxpayers. But consistency is key. America is staring down massive budget deficits as a result of the fiscal profligacy of this Congress. We have to continue working to put our country on a sustainable path, repeal ObamaCare, promote free trade, and continue to rollback the regulatory state.”

“If America is to maintain its place as the greatest country in world history, more members of Congress must fight for the foundational principles that made America great,” Brooks said. “I’m fighting in Congress for those principles, and I’m glad to have a partner as effective as FreedomWorks in the fight.”

Congressman Mo Brooks represents the Fifth Congressional District of Alabama.

Congressman Gary Palmer represents the Sixth Congressional District of Alabama.

Both Brooks and Palmer are members of the House Freedom Caucus.

Both congressmen have Democratic general election opponents.

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PEEHIP Faces Massive Shortfall

by Brandon Moseley Read Time: 3 min
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