Bluefield Daily Telegraph, Bluefield, WV

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March 1, 2010

Beer-tax gambit sets up Medicaid showdown

By TOM BREEN Bluefield Daily Telegraph

CHARLESTON (AP) — For a man proposing to raise taxes in an election year on a product as sacrosanct as beer, Del. Don Perdue seemed awfully calm during the stormy public debate over his plan. That’s because the Wayne County Democrat knew there was virtually no chance of raising the beer tax this year — a reality he readily accepted. Perdue wanted to use the tax to generate attention for a plan to fund substance abuse programs. He got that, and got a House committee to endorse a plan that establishes funding for such programs without raising a dime in taxes. But with that new legislation, Perdue also faces a collision with Gov. Joe Manchin, who warns that lawmakers are risking the state’s fiscal stability by proposing to tap needed cash reserves. Last week, after lawmakers agreed on the desirability of substance abuse programs but balked at using a beer tax hike to fund them, Perdue swiftly withdrew the tax proposal. In its place, he offered a plan to use money from a $374 million Medicaid reserve fund, along with any other sources the Legislature identifies, for substance abuse programs. The House Health and Human Resources Committee he chairs passed the measure unanimously. Even Republicans on the committee, who had been gleefully anticipating Democratic endorsement of a politically risky beer tax hike, voted for the measure, albeit grudgingly. “It was partly a sincere belief in the benefit of tax and spend policies by the Democrats and partly a publicity stunt,” Berkeley County Republican Del. Jonathan Miller wrote on his Twitter page after the vote. Perdue apologized to the committee for the “somewhat manipulative” tactic, but ticked off a long list of grim statistics to illustrate the extent of West Virginia’s drug and alcohol abuse problem. The state’s rate of fatal overdoses linked to prescription drugs is more than twice the national average. Direct costs from drug and alcohol abuse cost the state correction system nearly $333 million a year, and the health care system $116 million a year. Estimates of untreated addicts go as high as 140,000 out of a population of 1.8 million. Despite that, 35 of 55 counties have no standalone treatment facilities. “I would use any artifice I could to make sure the light of day was on these problems,” Perdue said. For all that work, though, the bill is in trouble. Currently before the House Finance Committee, it’s raised the ire of Manchin, who rebuffed an attempt by lawmakers last year to tap into unspent Medicaid funds. “This would be an ill-advised move right now, knowing the financial pressure that by every indication will be visited upon this state,” Manchin told The Associated Press. Manchin’s administration projects the state will need to start spending the reserve on Medicaid expenses next year, and that the fund will become a deficit in 2013. Manchin also said some lawmakers seem mystified that West Virginia continues to hold its own as recession-fueled woes persist around the country. “They seem surprised that we’re not falling off the cliff,” Manchin said. “It’s because we haven’t done anything crazy.” The state budgeted a total of $26.6 million for substance abuse programs last year, according to Manchin spokesman Matt Turner, with federal dollars accounting for more than $15 million of that. “It would be different if we put forward zero, or we’ve identified a big need that we haven’t done anything about, but that’s not the case,” Manchin said. “They’re trying to make it look as if we haven’t done anything. For some people, enough is never enough.” Perdue, though, argues that the needs of the state aren’t being met. As evidence, he points to a plan released in November by the West Virginia Partnership for Community Well-Being, a plan drafted at Manchin’s request. That document called for spending $23.5 million annually on prevention, early intervention, treatment and recovery efforts. The state currently spends none of its own dollars on any of those areas except treatment, the panel reported. “This is where we are at this juncture,” Perdue said. “This bill puts us in a position where a year from now, or two years from now, we’ll be able to meet individuals in the street who recovered because of this legislation.” Associated Press Writer Lawrence Messina contributed to this report.

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