Texas Association of Business

The Obama Administration set up new IRS rules that require businesses to file 1099-MISC forms for annual expenditures over $600 with any one organization, like Office Depot.  This means that if you spend $600 or more on anything, including office supplies – you will have to file one of these forms.  Do you think that this radical red tape rule is good for your company?  If not, tell the White House and Congress that enough is enough.

http://www.votervoice.net/Core.aspx?AID=130&APP=GAC&IssueID=22325&SiteID=-1

By Mark Hemingway

At Investor's Business Daily, Sean Higgins and David Hogberg have a doozy of a story:

Internal White House documents reveal that 51% of employers may have to relinquish their current health care coverage by 2013 due to ObamaCare. That numbers soars to 66% for small-business employers.

The documents - product of a joint project of the Labor Department, the Health and Human Services Department and the IRS - examine the effects new regulations would have on existing, or "grandfathered," employer-based health care plans.

Draft copies of the documents were reportedly leaked to House Republicans earlier in the week. Rep. Bill Posey, R-Fla., posted them on his Web site Friday afternoon. (View the full report here.)

The Associated Press is also on the story. Even they can't ignore the dishonesty that was used to sell the health care overhaul:

Over and over in the health care debate, President Barack Obama said people who like their current coverage would be able to keep it.

But an early draft of an administration regulation estimates that many employers will be forced to make changes to their health plans under the new law. In just three years, a majority of workers - 51 percent - will be in plans subject to new federal requirements, according to the draft.

Austin -- The following statement may be attributed to Texas Association of Business President Bill Hammond:

"The Texas Legislature began to realize years ago that to achieve the necessary reductions in air emissions in this state would require not only the resolve to identify and make the reductions, but a process for efficient administrative, legal and technical review that would enable approval of the changes so that the environmental and public health benefits could be realized as early as possible. Federal law allows Texas to design its own permitting program as long as it meets EPA requirements.

"By law, EPA has 18 months to approve or disapprove any changes Texas makes to its air permitting program. For more than 15 years, however, EPA has been silent, completely ignoring the statute, while Texas businesses and industries implemented programs that both substantially improved air quality and reduced public health risks. Texas could hardly wait for more than 15 years for the federal government to act. Instead, we adopted programs that we knew were consistent with federal law and went about the business of cleaning up our air. Today Texas citizens are breathing clean air as a result. Houston has achieved what many would have considered impossible - attainment of the ozone standards years ahead of schedule.

"A simple reading of the Texas rules shows they violate no provision of federal clean air law. Simply looking at the results in air quality clearly shows they have accomplished exactly what the federal Clean Air Act intends. Texas has made enormous progress toward clean air while maintaining a health economy. EPA’s action will divert business resources away from air quality improvements, create uncertainty for businesses when more uncertainty in our economy cannot be tolerated and punish the State of Texas. Why? Evidently Texas’ success in improving both our environment and our economy, while Washington still argues about how to accomplish either, is something that EPA and the administration finds troubling."

By Erik Berte
FOXBusiness

A Democratic senator is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers.

The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people.

As FOX Business Network’s Gerri Willis reported Monday, these pensions are in bad shape; as of 2006, well before the market dropped and recession began, only 6% of these funds were doing well.

Although right now taxpayers could possibly be on the hook for $165 billion, the liability could essentially be unlimited because these pensions have to be paid out until the workers die.

It’s hard to say at the moment what the chances are that the bill will pass. A hearing is scheduled Thursday, which will give the public a sense of where political leaders sit on the topic, said Willis.

Just last week President Obama said there would be no more bailouts.

By JOHN C. GOODMAN

Millions of American workers could discover that they no longer have employer-provided health insurance as ObamaCare is phased in. That's because employers are quickly discovering that it may be cheaper to pay fines to the government than to insure workers.

AT&T, Caterpillar, John Deere and Verizon have all made internal calculations, according the House Energy and Commerce Committee, to determine how much could be saved by a) dropping their employer-provided insurance, b) paying a fine of $2,000 per employee, and c) leaving their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

A Congressional Budget Office (CBO) analysis of the House version of ObamaCare, which is close to what actually passed in March, assumed a $15,000 premium for family coverage in 2016. Yet the only subsidy available for employer-provided coverage is the same one as under current law: the ability to pay with pretax dollars. For a $30,000-a-year worker paying no federal income tax, the only tax subsidy is the payroll tax avoided on the employer's premiums. That subsidy is only worth about $2,811 a year.

If this same worker goes to the health-insurance exchange, however, the federal government will pay almost all the premiums, plus reimburse the employee for most out-of-pocket costs. All told, the CBO estimates the total subsidy would be about $19,400—almost $17,000 more than the subsidy for employer-provided insurance.

In general, anyone with a family income of $80,000 or less will get a bigger subsidy in the exchange than the tax subsidy available at work.

But will the insurance in the exchange be as good? In Massachusetts, people who get subsidized insurance from an exchange are in health plans that pay providers Medicaid rates plus 10%. That's less than what Medicare pays, and a lot less than the rates paid by private plans. Since the state did nothing to expand the number of doctors as it cut its uninsured rate in half, people in plans with low reimbursement rates are being pushed to the rear of the waiting lines.

The Massachusetts experience will only be amplified in other parts of the country. The CBO estimates there will be 32 million newly insured under ObamaCare. Studies by think tanks like Rand and the Urban Institute show that insured people consume twice as much health care as the uninsured. So all other things being equal, 32 million people will suddenly be doubling their use of health-care resources. In a state such as Texas, where one out of every four working age adults is currently uninsured, the rationing problem will be monumental.

Even if health plans in the exchange are identical to health plans at work, the subsidies available can only be described as bizarre. In general, the more you make, the greater the subsidy at work and the lower the subsidy in the exchange. People earning more than $100,000 get no subsidy in the exchange. But employer premiums avoid federal and state income taxes as well as payroll taxes, which means government is paying almost half the cost of the insurance. That implies that the best way to maximize employee subsidies is to completely reorganize the economic structure of firms.

Ultimately, we could see a complete restructuring of American industry, with firms dissolving and emerging based on government subsidies.

A much better approach was proposed by Sen. John McCain in the last presidential election. The principle behind that plan is enshrined in the legislation sponsored by Sens. Tom Coburn (R., Okla.) and Richard Burr (R., N.C.), and Reps. Paul Ryan (R., Wis.) and Devin Nunes (R., Calif). This approach would replace the current subsidies with a system that gives every family, regardless of income, the same number of dollars of tax relief for health insurance.

Under this approach, all insurance would be subsidized the same way, regardless of where it is purchased. All taxpayers would be subsidized the same way, regardless of how they obtain their insurance. Unlike the president's scheme, it makes sense both in terms of equity and economics.

Mr. Goodman is the president and CEO of the National Center for Policy Analysis.

Savings Lives, Saving Dollars
Bill Hammond, President/CEO, Texas Association of Business

Despite financial troubles across the globe, Texas weathered the economic storm better than any place in America; in large measure due to state leaders passing sound public policy. For all that success, there’s no way to get around the fact that the State of Texas will be facing a multi-billion dollar budget shortfall in the next biennium. In the midst of the back-and-forth attempts between agencies and leaders to identify and root out waste, TAB believes ridding the State’s ledgers of unnecessary burdens and costs must be priority number one.

Nowhere can we identify potential savings easier than in the health care arena. By expanding Medicaid managed care (MMC) in Texas, we can save over $160 million in business and taxpayer dollars over the next three years. What’s even better than the savings?  Increasing the access and quality of health care services available to thousands of Texas citizens.

The Texas Legislature needs to continue to take steps to ensure that Medicaid services are being delivered as effectively as possible across the State, without compromising the quality, access and affordability of these services.

Unfortunately, a major hindrance under current law hinders the quality and access of Medicaid services.  

Something is amiss in the Rio Grande Valley as a result of the current prohibition of the use of the HMO model of managed care in Cameron, Hidalgo and Maverick.  These three counties were exempted as a result of a floor amendment to H.B. 2292 during the 2003 regular legislative session.  The exemption left 350,000 Medicaid recipients on the outside looking in. 

More alarming is the explosion in the over-utilization of medicine in fee-for-service based areas.  Texas recently received national attention after the New Yorker published an article that highlighted the disparities of costs and health care services provided in McAllen, TX versus El Paso, TX.  These two cities have strikingly similar demographics, yet medical spending grew about five times faster in McAllen than in either El Paso or in the United States as a whole.  What did they get for that money?  More medicine, tests, more surgeries and, consequently, more time in waiting rooms.  

One would figure that with all those extras, McAllen would have better health care.  However, that notion is false.  McAllen scored lower than El Paso (and the US average) in measures of health care quality.  Is it any coincidence that McAllen is located in a county where Texas is prohibited by law from expanding MMC, while El Paso has an MMC program?  

Texas businesses pay 62 percent of the combined state and local taxes. Therefore, employers have a major stake in how efficiently and effectively the coordination, management and supply of healthcare services is being rendered in Texas, and how the demand for these services is being met.

TAB is committed to ensuring that families across Texas have top-notch access to health care and excellent quality of care, all while producing a cost savings. The sky-rocketing health care costs in the three exempted Texas counties are adding tens of millions of unnecessary dollars to our tax burden.

Texas knows Medicaid managed care works-- both for the Medicaid recipient and for Texas’ budget. The employers and citizens of Texas deserve to have the best costs and the best access to health care services throughout our entire State.

The Texas Association of Business (TAB) today released a report entitled Expanding Medicaid Managed Care in Texas: The Right Dosage for Texas Recipients, a comprehensive primer on the benefits of expanding Medicaid managed care (MMC) in the State of Texas, specifically in the Rio Grande Valley.

“The businesses and employers of Texas want to see increases in the access and quality of health care services available to their employees, to their families and to the entire workforce,” said TAB President Bill Hammond. “Not only would Texas be saving business and taxpayer dollars, but most importantly, we would be increasing the access and quality of health care services to thousands of Texas citizens,” said Hammond.

“The State of Texas is now facing a multi-billion dollar budget shortfall in the next biennium,” said Hammond. “Nowhere can we identify potential savings easier than in the health care arena. By expanding the Medicaid managed care system in Texas, we can save over $160 million in the next three years alone.”

Despite MMC’s success and the strong evidence of over-utilization of medicine in fee-for-service based areas, 350,000 Medicaid recipients in the Rio Grande Valley are excluded from MMC programs as a result of a floor amendment to House Bill 2292 during the 78th Regular Session in 2003. Since that time, the medical spending in McAllen, an area exempted by H.B. 2292, has grown five times faster than the medical spending in El Paso, an area with similar demographics, and in the United States as a whole.

Texas knows MMC works, both for the Medicaid recipient and for Texas’ budget. The employers and citizens of Texas deserve to have the best costs and the best access to health care services available throughout our entire State.

The full report can be found at http://www.txbiz.org/uploads/MedicaidManagedCare.pdf.

By STEVE CAMPBELL
sfcampbell@star-telegram.com

For the second year in a row, Texas' five major metropolitan areas nailed down half the top 10 spots in an annual ranking of the best cities to find a job.

"If you look at all the regions, nothing else does as well as Texas," said Michael Shires, a professor at the Pepperdine University School of Public Policy in Malibu, Calif., who compiled the rankings with Joel Kotkin, a distinguished presidential fellow in urban futures at Chapman University in Orange, Calif. The report was published Wednesday by Newgeography.com.

Austin-Round Rock-San Marcos once again led the list of large cities. Rounding out the Texas quintet are San Antonio-New Braunfels (No. 2), Houston-Sugar Land-Baytown (No. 3), Dallas-Plano-Irving (No. 5) and Fort Worth-Arlington (No. 7).

On the list for medium-sized cities were El Paso (No. 5), McAllen-Mission-Edinburg (No. 6) and Corpus Christi (No.7). Among the top small cities were College Station-Bryan (No. 3) and Killeen-Temple-Fort Hood (No. 4).

"During volatile times, places with broad-based growth strategies -- like Texas and Utah -- do best," Shires wrote in an article accompanying the rankings, "Finding the Good in This Bad Time."

"Cities that are heavily dependent on a narrow set of industries leave themselves vulnerable, paying back the gains of good years in poor years.

"Texas and Utah are states that encourage entrepreneurship and have a low cost of living," he said. "That's why I think they are going to be a good measure as we go forward. At places like Fort Worth, the level of growth is going to come back pretty easily."

He noted that the high rankings for Texas cities weren't just a product of the energy industry. The state also made some key economic adjustments in response to a previous downturn, the savings-and-loan crisis of the 1980s.

"The state instituted new laws that imposed a range of disciplines on financial markets, such as limiting home-equity lines, thereby minimizing the damage to the state's economy as those markets went topsy-turvy," he wrote.

Shires said the rankings emphasize the "robustness of a region's growth both recently and over time." It is based on three-month rolling averages of monthly employment data from the Bureau of Labor Statistics from November 1999 to January 2010.

The bottom of the ranking is primarily made up of formerly high-flying real estate markets in the "sand states" -- California, Florida, Arizona and Nevada -- and manufacturing regions in the Rust Belt -- Detroit, Cleveland and Birmingham, Ala. -- where the recession throttled production.

Nationally, Shires said two employment sectors -- government and military -- drove job creation in highly ranked places like northern Virginia and Washington, D.C., and in small cities like Killeen and Fayetteville, N.C., that are home to large military bases.

"I think the big story nationally is that when we recover, it's going to happen, for the most part, in smaller cities and places like Fort Worth where the economy didn't dive as far. Those places are going to lead us out of the recession," he said.

"Texas is sitting well right now," he said. "But I do think some of these other places in the Midwest and mountain states are going to catch up."

By: Mark Tapscott
Editorial Page Editor

Thinking about starting a business but not sure where to locate it? The Small Business and Entrepreneurship Council (SBE) has just the thing for you - an index of how friendly each of the 50 states are in their tax codes to such endeavours.

South Dakota, Texas, and Nevada are the top three states with the most small-business and entrepreneur friendly tax systems, according to the latest edition of the index. To grasp just how difficult a task is facing Gov. Chris Christie's New Jersey is the worst state in the Index.

The index measures 16 different factors in rating an individual state, then assigns it an index number based on its composite performance on those factors. With the economy in the Great Recession, state tax policies are even more important to small businesses and entrepreneurs, according to Raymond J. Keating, SBE's chief economist and author of the index.

"The economy started to hit rough waters in late 2007. Lawmakers at the federal level made matters worse by imposing and pushing for increased tax and regulatory burdens that will raise costs for the entrepreneurial sector of the economy. Unfortunately, state lawmakers in many states have piled on with their own burdens. Indeed, many state tax systems send an unmistakable signal to investors and entrepreneurs that they would be better off doing business elsewhere," Keating said.

"Taxes at the state and local levels matter by diverting resources from and reducing incentives for productive, private-sector risk taking that generates innovation, growth and jobs. Quite simply, economic recovery will be restrained by high and/or increasing taxes, or boosted by low and/or falling taxes. Governors and legislators have a choice," he said.

The rest of top 10 states in the index include, in rank order from fourth to 10th: Wyoming, Washington, Florida, Alabama, Alaska, Ohio, and Colorado.

The rest of the bottom 10 states after New Jersey include, starting with 49th Minnesota, followed by California, New York, Maine, Iowa, Vermont, Oregon, Massachusetts, Rhode Island, and Hawaii.

New Jersey's only consoliation is that the District of Columbia would rank 51st if it were a state.