As part of the massive reductions in the state Medicaid program enacted by the legislature in 2005, the legislature directed that the current state Medicaid program expire in 2008, and a new health care system be considered by the legislature and enacted prior to that date. For the past two years, the legislature has conducted hearings throughout the state, seeking public support for their proposed reduced health care system. However, during those same two years, in spite of claims by legislators leading up to the 2005 Medicaid cuts that the costs of the system were bankrupting the state, state revenues have actually increased by over $500 million.

While it was expected that the legislature would address the new reduced health care system during the 2007 legislative session (so that it could be in place and operational by 2008), now the General Assembly’s rationale for cutting Medicaid has gone by the wayside. Now, instead of being able to address cuts in state health care for the poor against the backdrop of a lean state budget, the legislature’s grounds for cutting health care seemingly have gone away. Therefore, instead of being able to cut health care, the attention of the legislature is now directed towards cutting state taxes as a precursor to being able to cut Medicaid and other programs for the poor.

Governor Matt Blunt and Speaker of the House Rod Jetton (R-Marble Hill) propose to take at least $100 million dollars of the state revenue and provide a tax cut to more affluent senior citizens through a social security tax deduction. There is also discussion of exempting from taxation certain public retirement pensions, such as fire, police and public school teachers, which would balloon the fiscal impact to several hundred million dollars, making it impossible to find funds to restore Medicaid health coverage to those who lost that coverage in 2005.

Government leaders realize that they must set the stage for permanent cuts in healthcare for the poor next year by cutting taxes seek to ensure that the state does not have the revenue to provide such health coverage to its poorest citizens.

Several years ago the Missouri Catholic Conference adopted principles of tax justice, including that taxes should be adequate and fair. The current tax cut proposals are neither. From the perspective of Catholic teaching, government has the duty to collect sufficient revenue to promote the common good, which would include ensuring that citizens have access to affordable health care. The state of Missouri is already failing in this regard and the proposed tax cuts will make it even less likely that vital services will be restored anytime soon.

The proposed tax cuts will create even more inequities in Missouri’s tax code. An estimated 72 percent of seniors will receive no tax benefit from the proposed tax deduction on social security benefits. Meanwhile, seniors with incomes between $132,000 and $337,000, an income group that makes up only 2 percent of all seniors, will receive a tax cut of between $1,265 and $1,378.

As part of the on-going discussions subsequent to the 2005 Medicaid cuts, legislators have considered ways to make Missouri’s health care system more efficient but there has been no serious discussion of restoring Medicaid health coverage even for those programs that were almost eliminated by the 2005 funding cuts. Due to those cuts, a mother with two children no longer qualifies for health coverage if her income is more than 22 percent of the federal poverty level, which means she cannot earn more than $3,622 a year.

In 1996 Congress adopted policies encouraging people to move from welfare to work. As a part of this initiative it was recognized by most observers that those moving from welfare to work would need support with day care and health coverage. Many of the poor work for businesses that do not offer health coverage. Medicaid has been an essential part of the success of moving people from welfare to work. It now appears that policymakers are abandoning this approach and simply expecting people to sink or swim.

The Missouri Catholic Conference opposes efforts to reduce state taxes as a precursor to cutting Medicaid and other programs that assist the poor. The proposed tax cuts do not in any way benefit those who need public assistance and serve only to reduce state revenue needed to fund vital public services.