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One-time solution' to Medicaid shortfall

By By Sid Salter
Feb. 6, 2002
A week ago, State Tax Commission chairman Ed Buelow the former Warren County hog farmer and legislator told the Mississippi Legislature that Gov. Ronnie Musgrove's plan to escalate state tax collections would bring in less than half of the $100 million the governor projected in his $148 million Medicaid bailout.
But key staff members of the agency Buelow heads told legislators and Musgrove's staff this week that the broad concept of tax collection escalation will bring in even more than the $100 million Musgrove claimed it would on Jan. 25.
Buelow said last week the Tax Commission can't capture four weekly tax payments in a month. He said there were too many statutory tax diversions and he said it would cost the state $450,000 to get equipped to handle electronic transfers of the 4,200 taxpayers who currently pay more than $20,000 per month in state sales and use taxes. He slammed the proposal.
Buelow fired torpedoes
He said he told Musgrove's chief of staff Bill Renick of the flaws he perceived in the plan, but that Musgrove trotted it out anyway. After Buelow's criticisms, lawmakers, the press and the public were left with no other conclusion than perhaps Musgrove's numbers were flawed. Buelow's claims particularly ticked off Renick. Renick is firing back.
Renick said last week that while Buelow had indeed shared his "opinions" on Musgrove's tax collection escalation proposal with him, but that "we certainly were basing that proposal on more substance than Ed Buelow's personal opinion."
On Monday, House Ways and Means Committee chairman State Rep. Billy McCoy, D-Rienzi, led to passage in his committee House Bill 1379 a bill he and State Rep. Bobby Moody, D-Louisville, authored which he says will raise $119 million in one-time money through an escalation of the collection of sales, withholding, use and insurance premium taxes.
Guv, lawmakers agree
Buelow's key staffers told lawmakers the broad plan would work as Moody, McCoy and Musgrove said it would but significantly tweaked Musgrove's plan to eliminate administrative problems. In that, Buelow sees vindication.
But the broad concept of escalated sales and use tax collections is a good one. Why should government allow the private sector to play the "float" on taxpayer money for up to 50 days? Who does the status quo help most? Wal-Mart, with some 70 stores. Wal-Mart, which takes millions upon millions out of Mississippi daily, doesn't need a taxpayer "float."
Musgrove and the Legislature seem to agree on crafting a budget bandaid using escalated sales tax collections. Musgrove's broad concept was sound and the Moody-McCoy bill puts that concept into action. It's a one-time solution, sure, but it's the one-time solution that's most palatable to the taxpayers.