BOBBY HARRISON: Barbour, hospitals have seen friendlier days amid politics

By NEMS Daily Journal

JACKSON – Anytime the Legislature is in session, the associations roam the halls of this ornate state Capitol. The more cynical might say they own the halls. I’m not that cynical yet.
But there is no disputing the associations’ representatives walk these halls yielding tremendous influence and power.
They are the Mississippi Manufacturers Association, State Medical Association, Mississippi Association for Justice (previously the Trial Lawyers Association), Hospital Association, Bankers Association, Gaming Association, Restaurant Association. There are many others.
These associations represent much of the wealth and power of Mississippi.
In 2003 when Republican Haley Barbour was challenging Democratic incumbent Ronnie Musgrove for governor, tort reform was the buzz phrase. These associations got some tort reform in the now infamous 83-day special session in 2002 and they (with the exception of the trial lawyers) wanted some more.
Barbour told them to stick with him during the election and he would ensure they would get additional protections from lawsuits. And they did stick with Barbour with the exception of the trial lawyers, who were not crazy about Musgrove either.
With near unanimous support from the business and professional groups, Barbour shattered all previous fund-raising efforts by a Mississippi politician and won the 2003 election.
And in that first year in office he got the associations their additional lawsuit protections. The governor was true to his word and has received nationwide praise from business groups for his efforts.
The associations (with the exception of the trial lawyers) and the governor were happy.
An alliance that already existed between Republicans and business interests was fortified in Mississippi. But in recent years a few cracks have appeared in that fortification.
Barbour’s veto of legislation that would have provided a tax break to furniture companies in an effort to keep jobs from going overseas would be seen as a crack by some – particularly by members of the Mississippi Furniture Association.
The biggest split, though, is between Barbour and the Mississippi Hospital Association. In 2003, the Hospital Association was one of the most vocal proponents of the changes in torts that Barbour delivered.
But that was 2003 and 2004. Now things are not so good. The split between the Republican governor and the Hospital Association is at the very core of the current state budget impasse.
Barbour and the Senate leadership – Lt. Gov. Phil Bryant and Appropriations Committee Chairman Alan Nunnelee of Tupelo – are dead set on taxing hospitals to help fund the budget even though both chambers of the Legislature rejected that proposal during the 2009 session.
The dispute goes back to Barbour’s first term when federal Medicaid officials ruled invalid the mechanism the state was using to draw down about $250 million in federal Medicaid dollars. For years, about 30 publicly owned hospitals – less than one-third of the state’s total – were providing state matching dollars (the hospitals say $80 million while Barbour says $90 million) to be used as matching funds to draw down the federal money.
Then federal officials – this was the George Bush administration with whom Barbour had a close relationship – said the state could not use the mechanism to draw down the funds because it was not a tax. The hospitals put up the state money and got it back. There were no winners and losers.
After the federal ruling, Barbour said he would impose a tax on all hospitals. Barbour said even under the new assessment system hospitals would benefit since federal money would be drawn down for hospitals to treat Medicaid patients.
But the Hospital Association objected. The association said its members should not bear the total brunt of a tax increase to provide a state service.
The nerve of an association that owed so much to the governor to oppose the governor.
When Barbour was unable to get his tax proposal through the Legislature, he said he would enact it on his own. The Hospital Association took him to court, claiming the Constitution gives only the Legislature the authority to levy taxes.
Remember that ninth grade civics lesson?
Thus far Barbour has been blocked at every turn on his hospital tax increase.
It’s almost to the point where it seems personal between the governor and the Hospital Association – to the point where it could prevent the Legislature from adopting a budget for the upcoming fiscal year that begins on a quickly approaching July 1.

Bobby Harrison is Capitol Bureau reporter for the Daily Journal. Contact him at (601)353-3119 or bobby.harrison@djournal.com.