Gray says he won’t spend District’s $417 million budget surplus

Gray says he won’t spend District’s $417 million budget surplus

By Mike DeBonis, Washington Post, Published: January 29

Mayor Vincent C. Gray (D) said Tuesday that he plans to use an expected boost in future District revenue to pay for affordable-housing initiatives and long-delayed raises for city employees. But he said he will not spend a budget surplus from the city’s past fiscal year, disappointing advocates who wanted an immediate infusion into social service programs.

Gray announced that keeping the $417 million surplus in the District government’s savings account will build the city’s reserves to $1.5 billion — the highest level since 2005 and the second-highest total since the city gained limited independence from Congress.

Despite the windfall, Gray said he will not propose any new spending until Chief Financial Officer Natwar M. Gandhi issues new revenue projections in mid-February for the current and upcoming fiscal years.

Gandhi has been reluctant in the past year to revise revenue upward while the federal budget situation is unsettled. “The federal government will no doubt continue to anchor the District’s economy, but given the current budget scenarios, it can no longer be counted on as a source of real growth,” he wrote as recently as September.

But Gandhi said Tuesday that cash reports he has reviewed look “far better than we had originally anticipated.”

“I’m not backing away from my concerns about the ‘fiscal cliff’ and the federal budget,” he said. But “we are adding about 1,100 new people to the city every month. These are people, young people mostly . . . a lot of disposable income. I like them coming to the city. They pay a lot of taxes.”

With the exception of property taxes, every major District revenue source outperformed projections, adding $300 million in locally generated tax dollars, according to city finance data. Business taxes brought in $78 million more than expected, sales taxes overperformed by $68 million and estate taxes by $53 million. A single, unidentified estate brought city coffers $50 million.

In total, revenue came in 2 percent higher than expected.

Meanwhile, city agencies underspent a combined $117 million in their 2012 budgets. The District’s child-welfare agency, for instance, served fewer children than anticipated and thus spent $3.2 million less than expected.

Gray said keeping the surplus banked will improve the District’s balance sheet, helping to build reserves back to pre-recession levels and closer to an informal target of enough cash on hand to cover two months’ expenditures.

But some social service advocates decried Gray’s stance. They said it is callous to save the surplus to satisfy Wall Street bond raters while housing and welfare programs are underfunded. “DC should be a just community that is committed to the inclusion and well-being of all District residents, not one that fills its coffers with unprecedented riches while leaving its residents in harm’s way,” read a posting on the Web site of the Washington Legal Clinic for the Homeless.

At a news conference and at a later luncheon interview taped for city cable TV, Gray intimated that he is prepared to propose significant new spending when the new revenue projections are released. He could send lawmakers a supplemental budget for the rest of fiscal 2013, which ends in September.

“We think we’ll have an opportunity to make important and significant new investments in social programs that I have certainly wanted to be able to make for a long time,” the mayor said.

D.C. Council member Jack Evans (D-Ward 2), finance committee chairman, said the revenue upgrades could total $200 million a year.

Gray said he is “not at a position” to propose reducing taxes on city residents or businesses: “We’ve still got a lot of needs that have to be met in the District of Columbia. And I don’t know that we’ve gotten to a place of certainty yet where I would feel comfortable doing that.”

At the luncheon, the mayor said he is ready to propose new efforts to build and preserve affordable housing. He added that concluding new collective-bargaining agreements for city employees is also a priority.

“We’ve got a workforce that hasn’t had a raise in years, and I think we’ve got to look at that,” Gray said. “These are the people who get the snow off the streets, pick up the leaves, pick up the trash, make sure that our streets are paved.”

“You can’t give it to everybody,” interviewer Carol Joynt suggested.

“Well, maybe we will be able to support everybody,” Gray said. “We’re in active discussions with all of them. . . . We want to be able to do something for all the people who work in all those areas.”

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016


D.C. set to announce budget surplus

D.C. set to announce budget surplus

Tuesday – 1/29/2013, 1:59am ET

Associated Press

WASHINGTON (AP) – The District of Columbia continues to be in much better financial shape than most if not all states.

The city’s population is swelling, and its commercial real estate market is booming. That translates into more tax revenue for the city, which is expected to announce a budget surplus Tuesday in the $400 million range.

While many states struggle with painful budget cuts, the surplus is sure to trigger debate in the district about what to do with the money. Mayor Vincent Gray has made shoring up the district’s finances a priority, and he’s likely to argue that most if not all of the money should go into the city’s reserve fund.

But D.C. councilmembers have their own ideas about how to spend the money.

District’s top 25 delinquent taxpayers owe $3.25M

Jan 28, 2013, 9:23pm EST

District’s top 25 delinquent taxpayers owe $3.25M

Michael Neibauer

Staff Reporter- Washington Business Journal

Email | Twitter

The District’s top 25 delinquent taxpayers, a collection of individuals and businesses from D.C. to Illinois to South Carolina to Paris, owe more than $3.25 million, the D.C. tax office reports.

A healthy chunk of money, certainly, but nothing compared with what the top alleged scofflaws owed in sales and income taxes less than two years ago.

At the top of the revised list is Reyes Holdings LLC of Rosemont, Ill., owner of Premium Distributors of Washington, D.C. According to the Office of Tax and Revenue, Reyes owes the District government $372,906,96. I forwarded Reyes representatives the tax office report, but they have not yet offered to comment.

When the delinquent list was last updated, in fall 2011, 18 individuals and businesses accounted for more than $25 million owed to District coffers. One person, attorney Barry Morewitz, was responsible for $17.8 million of it. Morewitz, whose house was seized by the D.C. tax office in November 2011, no longer appears on the list.

Neither does William Webster, who owed $856,439, or Russell Winter, who owed $823,001, or Daniel and Myra Harrison, who had run up an unpaid tax bill of $725,373 or Nicholas Cho (of Murky Coffee) or TGR Inc. (doing business as Teatro Goldini).

Actually, the new list, current as of Jan. 20, has a completely different set of people and companies — everyone from the 2011 version either came into compliance or was purged for one reason or another (statute of limitations, for example).

Second on the updated list, at $273,819.24, is DHW LLC. There is little information about the company besides an address, 2101 E St. NW, the American Foreign Service Association.

Fifth on the list is David Blee of Greenwich Parkway NW, who owes, according to the tax office, $166,560.59. Blee, is, or was, managing director of The Forrestal Group and executive director of the U.S. Transport Council. He could not be reached for comment.

John Clyburn, a former D.C. contractor, owes $91,215.85, according to the tax office, while Excel Building Services Inc. of Fairfax owes $89,063.60, and Forensic Sciences Medical Group $84,489.15.

James Lahey, whose address is listed by the tax office as 56 Rue De Turbigo in Paris, owes $80,178.19. And D.C. claims it is due $80,166.43 from Judith Potter of Rock Hill, S.C.

CUS4 Inc., a defunct Virginia corporation, owes $121,178.16, according to tax office records.

Reporter’s Note: I was eight steps from linking that CUS4 bill to a current Obama administration official. The address tied to the debt, provided by the OTR, belongs to a Department of Education appointee, but as it turns out, the debt is owed by the former owner of the home.

Michael Neibauer covers economic development, chambers of commerce, transportation and politics.

J.D. Power: Auto Claimants Being Paid Faster; Happier as a Result

J.D. Power: Auto Claimants Being Paid Faster; Happier as a Result

Overall Satisfaction Is Up, But Repairs Can Be Problematic

By Christina Bramlet,

January 25, 2013

As repairable and total loss auto claims are being paid faster, policyholders and claimants report being a little happier about the entire claims process.

At least that’s what the results of the J.D. Power and Associates 2013 U.S. Auto Claims Satisfaction Study-Wave 1 indicate. Released yesterday, the study’s findings point to a six-point increase in claimant satisfaction when the Westlake Village, Calif.-based firm compared the 4Q 2012 results to the same period the previous year.

Customer satisfaction with the auto claims process registered at 861 (on a 1,000-point scale), up from 855 for the fourth quarter of 2011. The hike in overall satisfaction, J.D. Power says, can be attributed largely to an 11-point improvement in settlement satisfaction.

Timing Is Key

Driving smoother settlements is a decrease in the average time auto claimants wait to be compensated by insurers. J.D. Power reports that claimants’ average wait time for payment was 13.9 days in the fourth quarter of 2012, compared to 16.4 days for the same period in 2011.

While the average time to pay claimants for a repairable claim (11.8 days) decreased by 1.3 days from 4Q 2011, the most notable decrease is in the time required to pay total-loss claims—down by an average of 5.1 days to 18.5 days.

"Regardless of the claim type, the faster the claimant is paid and can move forward with a repair or to replace their vehicle, the more likely they are to be satisfied," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "In addition, satisfaction with the claims professional is at an all-time high, indicating that the process is becoming smoother, with more frequent updates throughout contributing to a much more satisfying experience."

The study measures claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of the claim, a claimant may experience some or all of the following, which are measured in the study: first notice of loss (FNOL); claim service interaction; damage appraisal; repair process; rental experience; and settlement.

Auto Repairers Lagging

Interestingly enough, while overall claims satisfaction improved, contentment with the repair process was somewhat dubious. The study pointed to a slight increase in average repair cycle times, from 12.3 days in 4Q 2011 to 13.5 days in 4Q 2012.

This would partially account for the subtle decline in participants’ satisfaction with the repair process—down to 862 from 864 during the fourth quarter of 2011. Contributing to lower satisfaction is a decline in the percentage of vehicles being fixed right the first time—89 percent in 4Q 2012, compared with 91 percent in 4Q 2011.

"While insurers have made significant progress in the past 12 months to improve the efficiency of the claims process, the repair providers have not kept pace," said Bowler. "Failure to repair a vehicle correctly is critical to the customer experience as average satisfaction scores tumble over one hundred points for those who had to bring their vehicle back for repeat repairs."

On average, claimants who take their vehicle to a non-direct repair provider wait 16 days to get their vehicle back, which is nearly 3 days (2.9 to be exact) longer than when dealing with a direct repair provider (13.1 days, on average). The gap in time between a direct repair provider and non-direct repair provider in the fourth quarter of 2012 has increased from only 1.8 days in the same period in 2011.

The 2013 U.S. Auto Claims Satisfaction Study-Wave 1 is based on responses from more than 3,000 auto insurance customers who settled a claim within the past 6 months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data for Wave 1 of the study was gathered in December 2012.

D.C. could force huge wage increase on city’s big retailers

D.C. could force huge wage increase on city’s big retailers

January 23, 2013 | 6:00 pm

OAKLAND, CA – JANUARY 08: The Wal-Mart logo is displayed on the exterior of a Wal-Mart store January 8, 2009 in Oakland, California. Wal-Mart has posted weaker than expected same store sales for December and has lowered its fourth quarter earnings forecast to 91 cents to 94 cents $1.03 to $1.07 a share. (Photo by Justin Sullivan/Getty Images)

Eric P. Newcomer

The Washington Examiner

Email Author

Cracks Appearing In GOP Opposition To Health Law

Cracks Appearing In GOP Opposition To Health Law

By Phil Galewitz

KHN Staff Writer

Jan 22, 2013

This story was produced in collaboration with

JACKSON, Miss. — Gov. Phil Bryant and Insurance Commissioner Mike Chaney have known each other for 30 years and call themselves friends.

Now, though, a wedge has come between the two elected Republicans — President Barack Obama’s health law.

Mississippi Gov. Phil Bryant and Insurance Commissioner Mike Chaney (Photos by USDAgov via Flickr and Mississippi Insurance Department)

Bryant is trying to stop Chaney from creating a critical feature of the Affordable Care Act — an online health insurance marketplace that will allow an estimated 250,000 Mississippi residents to shop for coverage and find out if they qualify for government subsidies or Medicaid, the state-federal health program for the poor.

Their dispute, in a state whose population is among the nation’s poorest and least healthy, is an example of a growing split among Republicans over whether to continue resisting the controversial law. Two months ago, Republican opposition was nearly uniform across the country. But cracks are appearing and they will widen, predicts Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. "The arc of partisan fever is beginning to recede and pragmatism is beginning to come to the fore," he says.

Arizona Gov. Jan Brewer, one of the law’s most vocal opponents, shocked the GOP-controlled legislature on Jan. 14 when she backed the health law’s optional Medicaid expansion. Brewer became the fourth Republican governor and 23rd overall to embrace extending Medicaid to cover residents earning up to 138 percent of the federal poverty level ($32,000 for a family of four). The other GOP states to sign on are Nevada, New Mexico and North Dakota.

Most states are expected to decide on expanding the program by late spring. As many as 17 million people would become eligible for Medicaid if all states participate.

Mississippi was one of four Republican states and 17 overall (plus the District of Columbia) that applied to the federal government in December to establish a state insurance marketplace, or exchange. The other GOP states were Utah, Idaho and Nevada. States that don’t set up an exchange will have one created by the federal government.


Q & A with Mississippi Gov. Phil Bryant

But because of Gov. Bryant’s opposition, Mississippi is the only state in that group that is still waiting for conditional approval. The federal Health and Human Services Department has delayed its decision until later this month, hoping the two men can work things out. That’s unlikely based on their comments.

Bryant, sitting in his office in the Capitol where he keeps the Ten Commandments on a pedestal near his desk, says he despises the federal law because he believes it will drive up costs and impinge on individual liberty.

He fears the exchange will drive too many people onto Medicaid, including those that are eligible now but not enrolled.

He also opposes expanding Medicaid, though some Republican lawmakers are more open to the idea because the federal government would pay the costs for the first three years and not less than 90 percent thereafter.

"This is a bait and switch," Bryant says, asserting that states will get stuck with higher costs.

An ad shown at a recent Mississippi State University football game showcased the "One, Mississippi" campaign and Insurance Commissioner Mike Chaney (Photo by Mississippi Insurance Department).

Regardless of whether the state or the federal government runs the exchange, people who qualify for the program will be directed to Medicaid. This will occur in all states, even those that don’t expand Medicaid eligibility under the law.

Chaney, too, had opposed the health law, but now he says having the state run the exchange is the best way to make sure it’s designed for the needs of Mississippi residents — a viewpoint privately shared by many lawmakers and interest groups in Jackson.

"I have known the governor for many years," Chaney says from his office overlooking the Capitol. "The governor and I are friends, and reasonable people can disagree and still be friends. But I think on this issue a state-based exchange is the right thing to do."

Chaney and Bryant first met in the early 1980s when they were in the Jaycees, a service group for young adults. Later, they served in the state House together and both have held elected and appointed positions ever since.

Chaney notes Bryant endorsed an insurance exchange while he was lieutenant governor in 2009, when then-Gov. Haley Barbour sought to create one even before the health law passed. Bryant says he favored an exchange that had no government subsidies or links to Medicaid.

On Friday, the insurance commissioner got a boost when state Attorney General Jim Hood, a Democrat, issued an advisory opinion declaring that Chaney has the legal authority to pursue a state exchange, citing a law change approved by state lawmakers in 2009. Bryant says the decision was expected because Hood is a Democrat and that it would not change his opposition.

Using millions of dollars in federal planning grants, Chaney has put Mississippi out front nationwide in developing the marketplace named "One, Mississippi."

An early version of the website is operational and a marketing campaign has begun with billboards and videos at Ole Miss football games.

Bryant worries about setting up a huge bureaucracy with dozens of new state employees. But so far all the work is being outsourced and there are no plans to use state money to operate it.

"Not a penny of state funding will flow through here," under current plans, says Lanny Craft, executive director of the state’s high risk insurance pool, an independent nonprofit created by the state, which houses the exchange. After federal start-up grants run out in 2014, the administrative costs will likely be covered by a fee paid by insurance companies selling policies in the exchange.

The state last year hired, a Silicon Valley-based company that already runs a national private online insurance exchange, to build its marketplace. The company plans to open a call center in Jackson to handle consumer questions.

On a recent day, company workers met to discuss the tasks ahead, including contacting customers whose credit cards expire before their next monthly insurance payment is due. The computer programming and other website development has continued even though the marketplace’s future is unclear, pending a decision by HHS.

If the federal government backs the state exchange, Bryant hasn’t ruled out taking other steps to impede its operation. For example, the governor controls a state board that must approve state contracts, such as those needed to outsource work for the exchange.

Asked if would also try to block a federal-run marketplace, he says: "Certainly I will."

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Employers, Insurers Press CMS to Prune Essential Benefits

Employers, Insurers Press CMS to Prune Essential Benefits

By John Reichard, CQ HealthBeat Editor

The growing concern among insurance analysts that coverage will be unaffordable in the new health care exchanges might create a fresh opportunity for federal officials to be persuaded to trim requirements in the final essential health benefits rule, which expected out in February or March.

Employers and insurers certainly hope so. With a few weeks to go before the final version is expected, they held a news briefing Wednesday to highlight six recommendations for shaping the rule in a way that they say makes coverage less costly.

Change the Essential Health Benefits Coalition wants the final regulation to include:

  • Scaling back requirements for pediatric dental and vision care benefits
  • Allowing the adoption of “medical management techniques” to ensure that the use of required benefits is consistent with evidence-based clinical practice guidelines
  • Backing off a requirement that plans cover one or more prescription drugs in each drug category
  • Limiting requirements for “habilitative services” that help people with medical conditions acquire new skills, such as helping a child with autism improve language skills or a person with cerebral palsy learn to walk (as distinct from rehabilitation services to recover lost skills)
  • Reconsidering the inclusion of state-mandated benefits
  • Considering an employer’s entire contribution to a health savings account when determining maximum deductibles.

The Department of Health and Human Services unveiled a proposed rule on essential health benefits Nov. 26, 2012. In a recent letter to HHS Secretary Kathleen Sebelius, Republican Sam Graves of Missouri, chairman of the House Committee on Small Business, noted that some of the benchmark plans that states may pick to comply with the benefits rule might not cover all the essential benefits.

“Virtually all small businesses will be forced to supplement state-selected policies that will not include coverage for mental health, substance abuse, pediatric dental and vision, habilitative care and additional prescription drugs,” Graves wrote. Many small-business owners will struggle to afford any health insurance coverage, let alone the supplemental coverage envisioned by the proposed rule, he said.

Neil Trautwein, vice president of the National Retail Federation, said at Wednesday’s briefing that insurers are struggling to put together affordable “bronze” plans to be sold in exchanges. Bronze is the least generous of the “metal” categories of coverage the health care overhaul (PL 111-148, PL 111-152) says must be offered.

Asked to mention one issue that must be addressed in the final rule to make coverage affordable, Trautwein said “it’s hard to boil down a list of recommendations into a single issue, but we want the EHB [final rule] to be more like private coverage is today, not like Medicare coverage is in terms of the specificity of included benefits.” And, he said, it should be easier to change benefits. The fact that private insurance plans can react more quickly to medical advances and don’t specify coverage service by service “is a strength of private coverage, and we would hope that the EHB” would follow that model, he said.

Geraldine O’Shea, an official with the American Osteopathic Association, said a requirement that benefits must follow evidence-based clinical practice guidelines would be the best way to ensure affordability.

Asked about the tipping point for when benefit requirements would drive premiums up so high that employers will no longer provide coverage and pay penalties instead for not covering workers, Paul Fronstin of the Employee Benefits Research Institute said “it might not take any increase” in premiums for that to happen. There’s already been a 10 percent drop recently in the proportion of employers who offer health coverage, he said.

Large numbers of employers may not drop coverage in 2014, but they could start to do so over the next decade. Trautwein added that “it’s tough to absorb additional cost” in the retail trade. “We have very thin profit margins.”

Pulling the Centers for Medicare and Medicaid Services in the opposite direction are patients’ advocacy groups, who say not covering certain medications or services could have devastating consequences. They’ve written CMS to urge coverage of new drugs and to ensure coverage of more than one medication per drug category. The groups include those representing patients with HIV/AIDS, hemophilia, kidney disease, mental illness and a wide range of other conditions.

Source: CQ Online News