D.C. Council chairman orchestrates vote on major tax cut, draws ire of mayor

D.C. Council chairman orchestrates vote on major tax cut, draws ire of mayor

By Aaron C. Davis, Washington Post, Published: May 27

D.C. Council Chairman Phil Mendelson says he will attempt to do Wednesday what Mayor Vincent C. Gray failed to do in this year’s budget: ask the council to implement the largest package of tax cuts for District residents in 15 years.

The cuts would be phased in over five years, first softening the tax burden for low- and middle-income residents in January. Over ensuing years, tax cuts would expand to benefit every city resident earning up to $1 million annually and even those who inherit multi­million-dollar estates.

Mendelson’s plan amounts to an eleventh-hour attempt to implement an overhaul of District tax policy that was recommended by a commission led by former mayor Anthony A. Williams to increase competitiveness and make the city’s tax code more progressive.

But how Mendelson plans to fund the tax package drew immediate criticism from Gray, who chose to adopt only a fraction of the panel’s proposals, saying most would cost the city too much in revenue.

Under Mendelson’s plan, the District would significantly curtail funding for a promised citywide network of street­cars, including delaying until late in the term of the next mayor a plan to pay for an increasing share of the multi­billion-dollar project with cash.

Mendelson released a budget plan late Tuesday showing that he would continue to fund streetcars at a rate of $400 million over six years and said he is not trying to kill the street­car network. Rather, he cast the package of tax cuts as a fair way to return the District’s increasing wealth back to residents, as well as to spur further investment.

Mendelson also said he was reluctant to throw an ever-greater share of city money toward a street­car project that so far has repeatedly failed to live up to expectations. “There’s no way that a street­car to Takoma is going to be built in the next three years, and they ought to spend their time and attention completing H Street,” Mendelson said of the administration’s delays in opening the first leg of the light-rail line.

Gray spokesman Pedro Ribeiro blasted the chairman’s plan, saying that it would take money from a project designed to reduce traffic and increase the quality of life citywide.

“Highly ill-advised doesn’t go far enough,” Ribeiro said. “The chairman is talking about cutting taxes for the wealthiest individuals and funding it by cutting infrastructure that would benefit residents all across the District. . . . Clearly the city doesn’t need . . . tax cuts for millionaires.”

The two council members running for mayor, Democratic nominee Muriel Bowser (Ward 4) and independent David A. Catania (At Large), said they didn’t have enough information Tuesday night to comment.

The last-minute cut to street­car funding echoed a 2010 plan by Gray when he was council chairman that drew intense criticism. But Mendelson’s proposal was well-received Tuesday by advocates for the city’s poor and the chairwoman of the council’s transportation committee, which has oversight of the street­car project.


Fewer D.C. Council members report outside income

Fewer D.C. Council members report outside income

By Mike DeBonis Updated: May 22 at 2:57 pm

It has become a staple of D.C. Council campaigns: The pledge to serve as a “full-time council member.”

Whether or not the politics have influenced the trend, there are now more full-time council members: Fewer lawmakers reported earning significant outside income last year to supplement their nearly $130,000 salaries, newly filed financial disclosure reports show.

Only two council members — Mary M. Cheh (D-Ward 3) and Jack Evans (D-Ward 2) — reported significant and ongoing outside income for 2013. David A. Catania (I-At Large) has relinquished the outside employment that once paid him in excess of $200,000 a year, and Michael A. Brown, who reported a sizable lobbying salary in 2012, left his at-large seat after losing his re-election bid that year.

Evans reported $190,000 in earnings from his of-counsel position at the Patton Boggs law and lobbying firm, the same as his 2012 earnings. Cheh reported income of $207,263 from her post as a George Washington University law professor, plus another $22,504 from delivering bar review lectures and about $2,000 in royalties from her legal writings. That’s down somewhat from Cheh’s outside earnings in recent years, such as the $280,000 she reported in 2010.

Catania in 2012 reported nearly $250,000 in earnings from serving as a vice president for the M.C. Dean construction firm. Early in 2013, after leaving the company, he took a salaried job with the Greenberg Traurig law firm in order to wrap up legal matters he had handled at M.C. Dean. That engagement ended in August, according to Catania’s 2013 report, paying him $88,000.

Anita Bonds (D-At Large), who was appointed to the council in late 2012, kept an outside job through April 2013 — shortly after she won a special election for the post. Her financial disclosure indicates she earned a raise with her election, reporting $27,826 in earnings from four months of work as a Fort Myer Construction Co. executive.

Also possibly in line for a raise is Brianne Nadeau, the Democratic nominee for the Ward 1 council seat being vacated by Jim Graham (D-Ward 1). Nadeau, who is favored by most observers in the general election, reported about $80,000 in earnings from her public relations job with Rabinowitz Communications. She has expressed support for banning outside employment for council members.

Charles Allen, the Democratic nominee in the Ward 6 race and likely successor to Tommy Wells (D-Ward 6), worked for the District government in 2013, as Wells’s chief of staff, and did not have to disclose his income. But a public database indicates that he’ll be looking at a small raise: In January of last year, Allen made $119,000, while Wells made $128,202.

The reports also require officials to disclose ownership interests or investments worth more than $1,000 in business enterprises regardless of whether or not they are doing business in the city. (Joint investment vehicles, like mutual funds and exchange-traded funds, are exempt.)

Chairman Phil Mendelson (D) made the most extensive disclosures, reporting stock holdings in various firms together worth more than $700,000. They include three closely regulated companies doing business in the District — Comcast, Pepco and Verizon — plus some firms that might seem at odds with Mendelson’s generally liberal political stances. Those include Imperial Tobacco Group, JPMorgan Chase, Chevron and ExxonMobil — the latter two notable given Mendelson’s introduction of a bill that would require the District to divest its investments in fossil-fuel-related companies.

Cheh reported owning IBM stock worth $10,665, and council member Kenyan R. McDuffie (D-Ward 5) reported owning a stake in a firm called Urban Detail Properties as well as small stock holdings in Coca-Cola Corp., General Electric, MetLife and Verifone. Also, McDuffie and Vincent B. Orange (D-At Large) both reported owning income properties in the city.

Marion Barry (D-Ward 8), who reported accepting nearly $7,000 in gifts from two city contractors in 2012, kicking off an ethics investigation that ended in his censure and loss of committee chairmanship, did not report accepting any gifts from so-called “prohibited sources” last year.

© The Washington Post Company

Former Ward 6 candidate Kelvin Robinson charged in D.C. campaign finance scheme

See Washington Post story below. Robinson serves as Director for Business, Policy and Marketplace Operations for the DC Health Benefits Exchange…

Former Ward 6 candidate Kelvin Robinson charged in D.C. campaign finance scheme

By Keith L. Alexander and Mike DeBonis, Tuesday, May 20, 8:16 PM

A former D.C. Council candidate who prosecutors say had ties with businessman Jeffrey E. Thompson was charged Tuesday with violating city campaign finance laws to help fund his two 2010 primary campaigns.

Kelvin Robinson, 53, was charged in D.C. Superior Court with conspiring to defraud the D.C. Office of Campaign Finance by receiving over $33,000 in campaign contributions, far more than D.C. law permits, and then concealing those contributions by failing to accurately report the amount of money he received.

The felony charge carries a maximum of five years in prison and potential financial penalties. No court date has been set.

According to prosecutors, between May 2010 and February 2011, Robinson, along with Thompson and another participant, Jeanne Clarke Harris, entered into an agreement to obstruct the campaign laws when Robinson was given about $7,500 for his campaign for an at-large seat, which he later abandoned. Robinson then was given about $26,000 by Thompson to fund his campaign for the Ward 6 council seat, which he lost in the Democratic primary.

Prosecutors said Robinson then filed false and misleading contribution reports to the Office of Campaign Finance.

An attorney for Robinson, who served as the chief of staff to former mayor Anthony A. Williams (D) from 2001 to 2004, did not respond to an e-mail seeking comment.

In March, Thompson pleaded guilty in federal court to funding a “shadow” campaign to help Mayor Vincent C. Gray (D) win the 2010 mayoral election by pumping more than $660,000 in donations into the campaign.

In 2012, Harris, also a supporter of Gray’s, pleaded guilty in U.S. District Court to making unreported payments to help finance Gray’s campaign. Gray’s 2010 campaign has been the subject of an ongoing federal investigation since the spring of 2011.

Gray has not been charged with a crime and was not linked to Robinson’s indictment.

Robinson is the first alleged recipient of Thompson’s largesse to be charged since Thompson pleaded guilty to the conspiracy charge in March.

At a news conference after the plea, U.S. Attorney Ronald C. Machen Jr. urged Thompson’s co-conspirators to come forward

“If you participated in backroom, under-the-table deals with Jeff Thompson, I urge you to come forward now and own up to your conduct,” Machen said. “I promise you, we are not going away.”

Bloomberg: The Little States That Couldn’t on Obamacare

The Little States That Couldn’t on Obamacare

358 May 13, 2014 5:39 PM EDT

By Megan McArdle

The state of Hawaii’s insurance exchange for the Affordable Care Act seems to be a financial disaster:

The rollout of Hawaii’s health exchange was delayed and plagued with technical problems. The Connector was awarded more than $200 million in federal funds. It has used about $100 million. It signed up 9,217 individuals, plus 628 employees and dependents. To date, the Connector has raised only $40,350 in user fees, according to Nathan Hokama, the exchange’s spokesman.

The exchange was projected to have annual operating costs of $15 million, which works out to about $1,500 a person. Those costs will be lower than expected, because enrollment is lower, but presumably a significant chunk of its expenses are fixed costs, which don’t fall just because the number of users does. The legislature has allocated just $1.5 million, or $150 per user, which is a lot cheaper — but not necessarily enough to run the exchange.

Hawaii is not the only place having funding problems. My own home of Washington just slapped a 1 percent annual tax on all health insurance policies — not just those sold on the exchange — to fund ongoing operations. If it just taxed exchange policies to cover the exchange’s $28 million annual budget, Washington would have to make it a 17 percent surcharge, which one imagines might dampen enthusiasm for the product.

The exchange’s director explains that really, this is a benefit to insurers, because they’re getting a new marketplace for their products. Some insurers don’t see it that way, however; they’re apparently threatening to sue.

What do the District of Columbia and Hawaii have in common? They’re tiny, which means high costs per user, because all that overhead has to come from somewhere. Rhode Island is also having problems, and the Providence Journal is urging the government to switch to the federal exchange:

The cost differential is stunning: The state House of Representatives’ fiscal office analysis shows that at an enrollment of 70,000 (we’re at fewer than 30,000 currently), annual administrative costs per person would be $343. If the current mix of HealthSourceRI policies were issued via the federal exchange, it would cost just $186, or 46 percent less — nearly half the price.

That brings up a question I’ve been pondering: Why did the Barack Obama administration put exchanges, and particularly state-based exchanges, at the heart of the operation? Billions have now been spent setting them up, and they will cost more money to run — more than some of these states can really afford.

I understand the argument for having state-based exchanges as an option. One of the nifty things about federalism is that states can be little laboratories, finding stuff that works that other states can then copy. I also understand the political argument that this appeased moderate Democrats, who were uncomfortable with the idea of a giant federal exchange taking over such an important economic function.

But the administration went far beyond “option”: It aggressively pushed state exchanges, repeatedly extending the deadline to decide until long after it was too late for anyone, state or federal, to do a good job building one. I can understand why they’d push big states such as Texas and Florida to build exchanges. But why encourage the District of Columbia, Hawaii and Rhode Island to follow suit? Arithmetically, it was unlikely that any of them would insure enough people to become financially viable — and certainly not in the time frame called for by the law. Why not quietly point out the terrible math and suggest they go federal?

Yes, yes, I know: The federal government forgot to allocate itself development money in the draft bill, which meant that adding more states was a financial burden. But that’s not a great justification for wasting huge sums of federal and state money on exchanges that seem unlikely to ever be viable. And what were these little states thinking? The mind boggles.

To contact the writer of this article: Megan McArdle at mmcardle3@bloomberg.net.

To contact the editor responsible for this article: James Gibney at jgibney5@bloomberg.net.

Kaiser Health News: D.C. Health Insurance Tax Triggers Insurer Pushback

D.C. Health Insurance Tax Triggers Insurer Pushback

By Lisa Gillespie

KHN Staff Writer

May 12, 2014

Insurers who are not selling their wares on Washington, D.C.’s exchange have signaled they may sue to block a D.C. council plan to charge them a 1 percent annual tax on all health-related plans sold in the city. The revenue would pay for the continuing operation of online marketplace.

During open enrollment, DC Health Link used the Good Success Christian Church as a meeting place to sign up people and provide information, answer questions, and enroll residents in affordable public and private health insurance plans (Photo by Mark Wilson/Getty Images).

The tax, which gained the council’s unanimous approval May 6, will be effective for 90 days on an emergency basis. The council will vote again in early June on whether to extend the assessment for another 225 days. However, it must undergo congressional review before it can be made permanent.

Under the council’s approach, the “taxable” health plans would include long-term care, disability, vision, dental and hospital indemnity, among others. The DC Health Benefit Exchange Authority will begin notifying the companies about the tax as early as next month.

Beginning Jan 1, 2015, D.C. and state-run marketplaces will no longer receive federal support. In response, some states have allocated general funds to cover operating costs. Others are imposing an insurer tax on each individual plan sold on the exchange.

In D.C., where the exchange will need $28 million in 2015, a tax only on plans that sell in the exchange translates into a 17 percent, per-enrollee assessment. That would likely be passed on to consumers in the form of much higher premiums, undermining the affordability of insurance, according to Mila Kofman, executive director of DC Health Link, the exchange.

But a spokesman from the Unum Group, which sells disability, critical illness, long term care and life insurance policies in D.C., says the concept is not fair.

“The entire industry of health carriers would be subjected to the assessment,” said Chuck Piacentini, a Unum assistant vice president and attorney. But Unum’s coverage — and that of other supplemental insurance companies — is not eligible to be sold on the online marketplace, which only includes major medical insurance plans that meet the health law’s essential benefits standards and other D.C. government requirements.

Unum would not confirm its intent to challenge the tax in court, only that it was weighing all of its options, but Kofman said the companies opposing the tax have threatened such action. In addition, the American Council of Life Insurers said legislative, regulatory and judicial options to stop the bill are on the table.

Kofman also noted that these companies might be worried that other financially-strapped states could adopt a similar funding strategy.

Hawaii, for instance, considered a fee for all health-related insurers, but it was ultimately nixed. Piacentini said they are not aware of other states currently considering a similar tax, but would be concerned if any eventually do go that route.

D.C., where the costs per enrollee are higher than states that have larger populations, has already received $134 million in federal grants for its exchange. So far, D.C. has enrolled about 45,000 people in marketplace and Medicaid plans. “When you build a system, there is a lot of fixed cost, and it doesn’t cost less for a small state versus a large state,” said Leslie Greenwald, chief scientist for health services at consulting firm RTI International.

Fourteen states and the District of Columbia are running state-based exchanges. Most have grappled with how to fund the exchange, though the different funding models are still in the experimental stage, according to Dan Schuyler, senior director of exchange technology at consulting firm Leavitt Partners.

Minnesota has kept the exchange it built and levied a 3.5 percent premium tax on plan insurers, while Nevada charges $4.95 to $13 per member on a monthly basis to insurers and California assesses insurers $13.95 per member per month. Hawaii’s state legislature provided $1.5 million of the $4.7 million requested, leaving the exchange to scramble to find other funding sources.

“Creativity is the key in determining a revenue stream,” Schuyler said.

Note to readers: The original version of this story has been updated and corrected to reflect two points: First, workers’ compensation plans are not considered taxable policies under the measure passed by the D.C. Council. In addition, the DC Health Benefit Exchange Authority will begin notifying insurers next month about the tax but not collecting it, as originally reported.


Enrollment spending much higher in state-run Obamacare exchanges, study shows

Enrollment spending much higher in state-run Obamacare exchanges, study shows

Half of federal aid went to just 17 exchanges

By Tom Howell Jr.

The Washington Times

Wednesday, April 30, 2014

A new study shows "striking" differences in state-to-state spending to get the uninsured enrolled in health coverage through an Obamacare exchange, with state-run markets spending nearly $12 more per uninsured resident than states that relied on the federal exchange system.

The Robert Wood Johnson Foundation’s data put spending, on average, at $17.15 per uninsured person in the state-run exchanges versus $5.42 in the 34 states that let the federal government set up their marketplace.

Differences in spending likely impacted final enrollment totals during the sign-up season from October to March, researchers said.

The highest average spending occurred among states that took on consumer assistance duties as part of a state-federal partnership exchange, which invested an average of $31.53 per uninsured resident.

The 16 states — plus Washington, D.C. — that set up their own exchanges received 50 percent of all federal funding for consumer assistance, the study says. The 29 federally run exchanges received just a third, even though those states account for 63 percent of the nation’s uninsured residents.

"The availability of federal money and the type of marketplace were huge factors in the amount states spent to enroll the uninsured," said Katherine Hempstead, who leads coverage issues at foundation. "The real question, which can only be answered in time, is how big of a role states’ consumer assistance programs played in overall enrollment success."

© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.

Read more: http://www.washingtontimes.com/news/2014/apr/30/enrollment-spending-much-higher-state-run-obamacar/#ixzz30UMkAV56
Follow us: @washtimes on Twitter

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