Traverse City Record-Eagle

Michigan

October 20, 2013

Expansion delay may mean less for roads

LANSING (AP) — The decision to delay Medicaid expansion in Michigan is having another side-effect besides forcing low-income adults to wait three months longer for health insurance required under the federal health overhaul.

It also could mean $73 million less for deteriorating roads at a time lawmakers are funneling more money there in part to avoid raising gasoline taxes and vehicle registration fees.

Lost in the Republican-led Legislature’s contentious approval of Medicaid expansion last month was a provision specifying legislators’ “intent” to put $193 million in savings into roads on top of a $230 million increase already committed in the budget that began this month. The state saves money under the law because mental health treatment and some prisoner costs it covers instead will be paid with federal Medicaid dollars.

Since Senate Republicans, deeply divided over implementing a key component of the Affordable Care Act, fell short of putting the expansion into effect Jan. 1, the state will save roughly $120 million, one-third less than expected, when more people are covered starting in late March or early April.

There is no guarantee the savings will go to road and bridge maintenance. While House leaders appear to prefer that route, at least one key Senate leader is opposed.

“I would like to see funding for roads increased on its own independently of other revenue streams,” said Senate Appropriations Chairman Roger Kahn, R-Saginaw Township.

All told, legislators could boost road funding by roughly $350 million this fiscal year depending on talks in the Capitol. Yet just getting Michigan highways and bridges up to par would cost an extra $1.2 billion a year in ongoing new revenue, according to Gov. Rick Snyder, a Republican whose call to significantly raise fuel taxes and license plate fees has stalled along with alternatives floated in the Capitol.

Lawmakers intend to add all of the Medicaid savings to the new Roads and Risks Reserve Fund, Kahn said, but they could decide against it. Or they might still earmark the money there but spend it to address other priorities besides transportation.

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