Traverse City Record-Eagle

Michigan

February 27, 2014

Lawmakers clash on roads, insurance tax hole

LANSING (AP) — Lawmakers are heading toward a mid-year budget showdown over paying for more road projects and filling a hole in Michigan’s collection of a tax that funds medical care for low-income residents.

A Republican-led House budget committee on Wednesday approved spending legislation to set aside $215 million for higher-than-usual road maintenance bills this winter and longer-lasting road and bridge projects. That’s $115 million more than the GOP-controlled Senate approved last week.

The House version, however, doesn’t include $115 million to plug an ongoing shortfall in the Medicaid budget, which has suffered because a 1 percent tax on health claims paid by insurers and HMOs isn’t generating as much as anticipated when it took effect in 2012. The Senate wants to divert money from elsewhere in this year’s budget to secure a crucial federal match.

Once the bill wins approval from the House as early as Thursday, differences are expected to be hammered out in a House-Senate conference committee within two weeks.

“My concern is by patching the hole in the (health claims revenue) is we’ve just put off the conversation for another year. I think all the interested parties have to come to the table and say we need a long-term solution to it,” said House Appropriations Committee Chairman Joe Haveman, R-Holland.

Gov. Rick Snyder and Republicans have pushed to address the problem by charging drivers $25 a year to help fund Medicaid, under an overhaul of the state’s auto insurance system that would reduce overall premiums and scale back unlimited medical benefits for those catastrophically injured in crashes. House Speaker Jase Bolger, R-Marshall, unveiled a new car insurance plan last week, but opposition still remains fierce and any possible deal is unlikely to be reached before the November election.

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