Counties, legislature may challenge line-item vetoes

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State > Lawmakers question constitutionality of SB 268

By Arin McKenna

It was obvious at the New Mexico Association of Counties (NMAC) legislative update — held at Fuller Lodge Wednesday — that it is not “end of story” for Senate Bill 268.
According to state law, counties are allowed to assess a one-eighth Gross Receipts Tax increment for healthcare costs. SB268 redirects one-twelfth of that increment to the New Mexico Human Services Department (HSD) to pay for hospitals and matching funds for Medicaid.
The redirect impacts the counties’ abilities to cover local costs such as indigent healthcare and mandated services such as ambulance.
At Wednesday’s meeting, state senators and New Mexico county officials alike expressed concerns not only about the bill’s impact on local governments, but about Gov. Susana Martinez’s line-item vetoes of the legislation.
One of the bill’s sponsors, state Sen. Nancy Rodriguez (D-Santa Fe) raised several issues, including a question of whether the bill is constitutional, since it forces the counties to redirect money approved by voters away from local governments into state coffers without any accountability.
“The counties lose complete control. That’s huge,” Rodriguez said. “Where the money goes to, you have no way to analyze, or refute, anything with this money. Because once you have released it to the state, that’s it. It’s gone.”
“I think everybody has seen numbers from Health and Human Services, the state agency,” said Curry County commissioner and NMAC president Wendell Bostwick. “But we’ve seen so many numbers, we want to make sure whenever they implement the program, what numbers we’re playing with.”
Rodriguez and county governments do acknowledge that county contributions are necessary to meet the federal match for Medicaid funds and to keep hospitals funded. Even with the county contributions, the state is $9 million short of receiving a 3-to-1 match in Medicaid funds.
Rodriguez suggested using the state’s reserve fund meeting the shortfall, but was unable to get action on that.
It is also questionable whether Martinez’s line items vetoes were constitutional. The governor only has the legal authority to line-item veto appropriations bills. Since this bill generates money for state funds from the counties, the legislators consider it a revenue bill.
“This is a bill that requires local governments, counties, to appropriate money to the state,” said Senator Daniel A. Ivey-Soto (D-Bernalillo). “But there’s no appropriation of state money.”
State Rep. Stephanie Garcia Richard (D-Los Alamos, Santa Fe, Sandoval and Rio Arriba) also weighed in on the controversy.
“Counties and the legislature worked together in good faith and negotiated out a compromise that was acceptable to both parties. Unfortunately, the governor’s unusual vetoes undermined the process, resulting in the elimination of carefully crafted terms of the negotiations,” Garcia Richard said. “The results are that counties are locked into a compromise that they did not agree to.”
The state legislative council services said that the one element that could possibly be considered an appropriation is that the money is channeled into “safety net pool,” a mechanism suggested by HSD for collecting the funds.
The issue is currently being researched so the legislature can decide whether to raise a legal challenge.
The most damaging of the governor’s line-item vetoes is the removal of a three-year sunset clause. Legislators and counties wanted to revisit the law to evaluate how it was working.
The potential harm of that veto is multiplied by the fact that the governor kept another element of the bill intact, one that restricts the counties’ ability to raise funds to pay for the mandate.
“The mandate is going to be in perpetuity, but the authority to impose a tax is sunset at three years,” said Liza Gomez Akley, who chairs NMAC’s Healthcare Affiliates group.
Martinez also line-item vetoed a provision that would have allowed counties to use healthcare GRT to assist low-income residents with insurance premiums, which Garcia Richard said “would have saved the state and providers money by putting indigent patients in a traditional healthcare system, which avoids ‘treatment by emergency room.’”
Martinez also vetoed using those money to help pay for co-pays and deductibles, something many counties have done in the past for those struggling to meet those obligations.
The governor’s vetoes also struck out provisions that required qualifying hospitals to provide financial counseling about hospital bills, have written assistance policies and to make reasonable efforts to determine whether patients are eligible for financial assistance before initiating collections actions.
A section prohibiting collection actions against an indigent patient with a household income under 200 percent of the federal poverty level was also struck.
“She obviously vetoed everything that she could to take the onus off of the hospitals and put it on the counties. So that is not good at all, and I think we need to take a look at that seriously,” Rodriguez said.
“This was a very hard-won compromise that nobody particularly liked, but we all could live with it. And I feel pretty strongly that for the governor to line-item veto a couple of key pieces out of it that were not appropriations is beyond her legal authority,” said Los Alamos County Councilor Pete Sheehey. “And it also is insulting to the legislative process, where these compromises are worked out. And if she can later pick and choose what she likes, that’s just not a recipe for a stable government.”
“We’ve got a bill, but we’re not finished,” Bostwick said. “We can come up with a better solution. And that’s where we think we are at the start, to come up with a better fix for our long-term healthcare needs within the State of New Mexico.”
Bostwick believes that a committee comprised of all the stakeholder — HSD, the counties, the hospitals and the New Mexico Hospital Association — could develop a workable piece of legislation.
NMAC has authorized Executive Director Steven Kopelman to research whether it is constitutional for the state to mandate that counties use local revenues for a state program and whether the governor’s line-item vetoes are legal.
Kopelman anticipates completing the study no later than the next board of directors meeting on May 2.