TLP: Flat Out of Tricks
State and municipal governments apparently are about to hit bottom. Seems like their ability to find new ways to cut services and impose fees and charges is nearing an end. Now officials facing budget holes are being forced to really roll out the clever.
Like the raid on a green energy fund the NYT scoped out:
In New York, government officials found $90 million to pay for schools by dipping into money generated by a multistate greenhouse gas initiative.Or renewed efforts to squeeze payments in lieu of taxes from non-profits, as detailed by the AP, via The Huffington Post:
In New Hampshire, the state took $3.1 million from a similar environmental fund. And in New Jersey, the government diverted its whole share: $65 million.
At least three financially troubled states have discovered in the Regional Greenhouse Gas Initiative, a cap-and-trade system, a convenient pool of money that can be drawn on to help balance state budgets.
In just over two years, the initiative, known as RGGI, has generated more than $729 million for the 10 states that have participated. Each state is supposed to use its share of the money raised to invest in renewable energy and to promote energy efficiency and consumer benefits, like programs that help low-income electricity customers pay their utility bills.
But the money is proving too much of a temptation for states not to use in other ways.
Critics say that diverting money from the fund for general spending, instead of using it on emissions control and energy savings, makes the initiative little more than a hidden tax on electricity.
Financially strapped U.S. cities are increasingly turning to private universities, hospitals and other tax-exempt nonprofits for cash, but a new report finds methods of collecting payments in lieu of property taxes from these institutions often lack consistency and transparency.And the decision by Arizona officials to eliminate funding for some organ transplants, which the NYT summed up as "death by budget cut":
The report ... by the Lincoln Institute of Land Policy, said more than 100 municipalities in at least 18 states are collecting payments in lieu of taxes (PILOTs), including large cities such as Boston, Philadelphia, Pittsburgh and Baltimore.
The study found that payments, if negotiated and administered properly, can provide a critical revenue stream for cities struggling to maintain services in challenging financial times.
"However, PILOTs are often haphazard, secretive, and calculated in an ad hoc manner that results in widely varying payments among similar nonprofits," the authors wrote.
A city's attempt to strong-arm hospitals and universities into making payments in lieu of taxes can backfire, the report warned, leading to strained relationships with key institutions and even "years of contentious, costly and unproductive litigation."
Effective at the beginning of October, Arizona stopped financing certain transplant operations under the state’s version of Medicaid. Many doctors say the decision amounts to a death sentence for some low-income patients, who have little chance of survival without transplants and lack the hundreds of thousands of dollars needed to pay for them.Creative financing can be so entertaining. But, hey, that's how we ended up in this mess, right?
“The most difficult discussions are those that involve patients who had been on the donor list for a year or more and now we have to tell them they’re not on the list anymore,” said Dr. Rainer Gruessner, a transplant specialist at the University of Arizona College of Medicine. “The frustration is tremendous. It’s more than frustration.”
Organ transplants are already the subject of a web of regulations, which do not guarantee that everyone in need of a life-saving organ will receive one. But Arizona’s transplant specialists are alarmed that patients who were in line to receive transplants one day were, after the state’s budget cuts to its Medicaid program, ruled ineligible the next — unless they raised the money themselves.
Francisco Felix, 32, a father of four who has hepatitis C and is in need of a liver, received news a few weeks ago that a family friend was dying and wanted to donate her liver to him. But the budget cuts meant he no longer qualified for a state-financed transplant.
He was prepared anyway at Banner Good Samaritan Medical Center as his relatives scrambled to raise the needed $200,000. When the money did not come through, the liver went to someone else on the transplant list.
“I know times are tight and cuts are needed, but you can’t cut human lives,” said Mr. Felix’s wife, Flor. “You just can’t do that.”