Jim Shella is reporting on political opposition to Gov. Pence’s view that Indiana should not take part in the Medicaid expansion part of the federal health care reform legislation. The Supreme Court held that states should have the ability to opt out.

Sen. Lanane says that if Indiana does opt out, it will be known as an “island of the uninsured.” On the map, if memory serves, the Island of the Uninsured is roughly southwest of the Island of the Misfit Toys across the Sea of Bad Ideas.

I think we’re going to pay the federal taxes anyway. The main question is whether they’ll come back to Indiana in the form of Medicaid dollars that will support 400,000 Hoosiers. The law provides for 100% federal funding through the first few years and 90% thereafter. There is a long term concern for those who don’t much like Medicaid in the first place; and I think Gov. Pence is one of those. The concern is that, sure, the federal government is funding the program now and promises to fund the lion’s share in the future; but what’s to say it won’t renege on that promise?

From that perspective, I think you have to figure out the lesser of evils. On the one hand, a potential financial burden for the state in the future that the state can opt out of if it’s bad enough; on the other hand hundreds of thousands of Hoosiers not getting health care coverage, leading to more sick and dead citizens, despite millions of Hoosiers paying federal taxes that could be available to fund that coverage locally instead of in other states. Seems like a no brainer to me, but then I don’t have political purity to worry about. By contrast, Gov. Pence doesn’t want to end up like Sen. Lugar.

Gov. Daniels recently issued a number of Executive Orders granting pardons for individuals who committed the following crimes: 1992 battery, 1963 burglary, 1999 battery, 1989 – 1995 Operating While Suspended (9 times), 1973 shoplifting, 1978 theft, 1971 assault, battery, and theft, 1955 “Automobile Banditry”, 1958 Burglary, 1955 “vehicle taking”, 1979 dealing marijuana, 1965, burglary, and 1969 burglary.

“Automobile Banditry” is a new one to me. The first Google result was a news archive result from 1921 with a headline “Automobile Banditry Is A Crime Now Covered By Indiana Statute”. The crime was defined as “use of an automobile by two or more persons to accomplish a crime or to escape from the scene of a crime.”

Other tidbits – the article reports that 280 new laws resulted from 832 bills introduced in the 1921 session. One bill that died would have amended the state’s blue laws to leave no “loophole for Sunday movies or baseball.” The 1921 session featured Indiana’s first female representative, Julia Nelson of Delaware County.

Because he doesn’t like Obamacare, future Governor Mike Pence has recommended something of a passive-aggressive course of action by Indiana in terms of (not) establishing a state-based health insurance exchange under the Affordable Care Act. His letter to Gov. Daniels is here. This has the effect of increasing the federal control over Indiana’s health care system. (This might not be a bad thing, policy-wise, but choosing increased federal control is a departure from Pence’s stated philosophy about wanting to reduce the federal government.)

Under the terms of federal law, states “may opt out of running their own exchange, in which case the federal government will step in to create an exchange for use by their citizens.”

Wikipedia has an explanation of the health care exchange concept here. Generally speaking, it creates one stop shopping for consumers where they can get an apples-to-apples comparison of policies; at least for a basic benefit package. Policies offered through the exchange: 1) Must be guaranteed issue: insurers will not be permitted to refuse to insure any individuals; 2) Must limit price variations: prices will vary based on four factors and not beyond a total factor of approximately 10; 3) Will be offered in four comparable tiers ranging from bronze to platinum with limited out of pocket expenses; 4) Have strict regulations on rescission (practice by which insurers take your premiums until you get sick then disqualify you for technical defects in your application); and 5) Lifetime and annual limits eliminated.

Reports are that Governor Daniels is going to replace outgoing Purdue President France Córdova. I have a general policy against talking much about local politics. While I haven’t decided if Purdue’s administrative decisions qualify, I don’t think I’m too far out of line repeating something I posted on Twitter: “I think Gov. Daniels role will be to raise piles of money like Jischke. And, with his connections, he’ll likely be good at it.”

Anyway, based on some comments in another thread, there seems to be some appetite to talk about this; so, have at it.

The Indy Star followed, to some extent, where Aaron Renn led much earlier in examining Indiana’s deal with Kentucky to build a bridge over the Ohio River. The Star article is entitled “Why Indiana is paying $255 million to tunnel under Kentucky’s trees”

Renn suggested that the headline should’ve been phrased as a question, ““Why Exactly Is Indiana Paying $255 to Tunnel Under Kentucky’s Trees?”” and noted that the Star missed the even bigger picture. (The linked blog post contains further links to Renn’s extensive analysis of the deal.)

As the Star’s own graphic shows, Indiana is actually spending $737.5 million on roadway in Kentucky. That’s over $100,000 per foot! You could probably literally gold plate the road for that. It’s more expensive than any project anywhere in Indiana. It is more than combined cost of the Indiana side of the river plus the new bridge.

The two states managed to take $1.5 billion in cost out of the project – good. But as part of that Indiana’s cost actually went up by $200 million while Kentucky’s went down by $1.7 billion – hello?!?!

The Star reports that Indiana and Kentucky will evenly split money from the bridge tolls – news to me – even though Hoosier motorists will pay $5 million more per year than Kentuckians. So not only is Indiana paying more than it’s fair share on a cost basis (including that $737 million in Kentucky) – it’s also shipping a huge chunk of Hoosier money across the river ever year to help Kentucky pay for its part of the project. Hoosiers will pay fully 74% of all local tolls collected on the bridges.
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It’s stunning to me that, to burnish his legacy by getting a bridge project done that had eluded both states for 40 years, Mitch Daniels is willing to throw Hoosier taxpayers and motorists under the bus like this. This is a deal that will live in infamy as Indiana’s worst transportation finance decision since the 1830s epic canal fiasco that bankrupted the state.

It’s not especially stunning to me. Look at Daniels’ role in drumming up the Bush administration rush to war in Iraq. He underestimated the cost to a laughable extent. He’ll nickel and dime programs he doesn’t particularly care about anyway. But, when the Governor misses financially, he misses big.

I was traveling, so I did not get a chance to comment on this one yet. Gov. Daniels yesterday announced that his administration had screwed up the state’s book keeping to the tune of $320 million. He spun it as a good thing, a “bank error in your favor.”

A Department of Revenue auditor last month discovered some corporate income tax payments submitted via electronic check were not being sent to Indiana’s General Fund, which pays for schools, roads and nearly all state services, but were sitting unused in the state’s Collections Fund.

It will be interesting to learn whether the blame for the mistake should be attributed to the Department of Revenue, Richard Mourdock’s office of the Treasurer, or somewhere else. (Charlie White probably gets a pass on this one.) When I heard about the announcement, a scene from Brewster’s Millions came to mind. The premise in that movie is that if Brewster spends $30 million in 30 days without any tangible assets to show for it, he inherits his uncle’s $300 million. Otherwise, the law firm handling the estate gets it. So, one of the firm’s associates, is told to sabotage Brewster’s efforts. To do so, the associate sandbags $20,000 which he “discovers” at the last minute.

The analogy isn’t all that strong; but, if this were not merely incompetence, there would be parallels in the sense that the General Assembly made policy decisions based on incorrect financial information provided to it by the executive branch; and those policy decisions, for the most part, went in the direction the Governor wanted – diminished funds available for infrastructure, education, and other public goods enjoyed by rich and poor alike; not to mention safety net programs mostly used by the poor alone.

Now, instead of using the money to defray the $2 billion we owe the feds for unemployment insurance or shore up the underfunded employee pension system; he is talking about giving a tax rebate to individual taxpayers? I guess I’d have to see the details before passing final judgment; but my suspicion is that, rather than giving $50 to each Indiana citizen or whatever, this money is better used to pay our debts.

Gov. Daniels’ two big privatization moves during his tenure have received some negative press over the weekend. The first, which was a debacle from the word “go” was the welfare benefits eligibility privatization, turned over to friends and well-wishers of the Governor. (h/t Advance Indiana). Matea Gold, Melanie Mason and Tom Hamburger, writing for the Los Angeles Times gave the matter some national attention, noting the extremely cozy relationships between the people involved and pointing out that this isn’t just some abstract problem; it had real consequences:

Louise Cohoon was at home when her 80-year-old mother called in a panic from Terre Haute: The $97 monthly Medicaid payment she relied on to supplement her $600-a-month income had been cut without warning by a private company that had taken over the state’s welfare system.

Later, the state explained why: She failed to call into an eligibility hot line on a day in 2008 when she was hospitalized for congestive heart failure.

“I thought the news was going to kill my mother, she was so upset,” said Cohoon, 63. Her mother had to get by on support from cash-strapped relatives for months until the state restored her benefits under pressure from Legal Services attorneys.

I’ve long maintained, that to people who do not see welfare benefits as a priority, these “errors” are more feature than bug. It reduces the cost of a program these policy and law makers didn’t much care for in the first place. Win-win! And, if it will also be profitable for people you do care about, well it’s no wonder you’ll be ignoring guys like Carl Moldthan when he tries to advise you that your privatization initiative has problems.

Though the $1.37-billion project proved disastrous for many of the state’s poor, elderly and disabled, it was a financial bonanza for a handful of firms with ties to Daniels and his political allies, which landed state contracts worth millions.
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Even before Daniels signed off on the privatization effort, the little-known Lucas Group started reaping benefits. Its role was not publicized at the time, but the consulting firm had a nearly $4-million contract — signed by Roob — to write the specifications by which the bidding companies would take over the system.

Like ACS, the Lucas Group had ties to former mayor Goldsmith: He served for a time as a senior consultant for the firm, which is run by a longtime associate. Goldsmith, now a deputy mayor in New York, said in an interview that he had nothing to do with the state’s awarding of contracts to the Lucas Group or ACS.

The other privatization story in the news this weekend was from Keith Benman, writing for the Northwest Indiana Times. (h/t Indiana Law Blog) who reports that, despite doubling tolls, the operator of the privatized Indiana Toll Road is running out of money.

The private operator of the Indiana Toll Road could be in danger of defaulting on its huge debt by early next year, according to a report on the news wire service Debtwire.

The May report in Debtwire, a Financial Times Group publication, stated Toll Road operator ITR Concession Co. is rapidly burning through an interest reserve account, which must be maintained to keep $4.1 billion in loans in good standing.

The lease has some protections for Indiana, but at the end of the day, a financially unstable operator can’t be good for the efficient operation and maintenance of one of Indiana’s most important roads. Maybe we won’t have to pick up any sort of tab, but how much control do we have over our road?