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1/28/2010

Flashbank: New Hampshire Newspapers Warned Lynch About JUA "Plan B"

Where is Plan B? Lynch remains silent
August 3, 2009
UNION LEADER
 
No sooner had a state Superior Court justice ruled unconstitutional the state's seizure of $110 million from a medical malpractice fund were tax-and-spenders talking about replacing that revenue by slapping Granite Staters with big, new taxes.
 
House Finance Committee Chairman Marjorie Smith instantly floated two ideas rejected by the Senate this summer: an estate tax and a capital gains tax.
If those come to pass, they would bring to 40 the number of tax or fee increases passed this year to balance the budget. Forty!
 
No one would be talking about these new taxes had Gov. John Lynch announced a Plan B in case his scheme to snatch that malpractice fund money failed. But to date we have heard no such offering from the governor's office…..
 
CLICK HERE FOR FULL UNION LEADER EDITORIAL

 
Face it, Governor, you need a 'Plan B'
August 3, 2009
CONCORD MONITOR
 
Last week, Belknap County Superior Court Judge Kathleen McGuire said that the state could not take $110 million from a medical malpractice fund to solve its current fiscal problems. McGuire reasoned that the Joint Underwriting Association has never used state money or needed the approval of the governor and Executive Council to conduct its business. Its workers are not state employees, and unlike state agencies, it is not represented by the attorney general's office. The court ruled that the fund is independent of the state and seizing its assets would be unconstitutional. The language in the statute creating the fund specifically states that any surplus must be paid to the plan's participants, as evidenced by two past distributions to members. The fund's members have precedent on their side.
 
Despite the ruling, Gov. John Lynch has refused to express anything but confidence that his position will prevail on appeal. The governor is leading with his chin. He and lawmakers need a backup plan in the event of a second judicial knockout. That plan should not be the product of a panicky, last-minute attempt to preserve the state's credit rating and keep paychecks from bouncing….
 
CLICK HERE FOR FULL CONCORD MONITOR EDITORIAL
 
 
Big budget gamble looking like a loser
August 2, 2009
NASHUA TELEGRAPH
 
For a governor who has never been a big fan of gambling, Gov. John Lynch certainly played the odds in his bid to balance the state budget by snagging $110 million from an insurance fund created to help doctors obtain malpractice coverage.
 
From the moment he proposed using surplus from the fund to balance the state budget, critics were apoplectic. Doctors and health-care providers sued. Republicans warned it would never work. A judge quickly ruled that the Joint Underwriting Association, which manages the fund, is not a state agency subject to the governor’s authority.
 
Now that same judge, Associate Justice Kathleen McGuire, has ruled the state had no right to claim the money as its own. Unless the state succeeds in appealing McGuire’s ruling to the state Supreme Court, lawmakers will be faced with a $110 million hole spread over the previous and current state budgets.
 
Considering the spending cuts, tax increases, state employee furloughs and other measures taken to balance the budget, finding this kind of money isn’t going to be easy. Banking only on the hope that the Supreme Court will overturn McGuire’s decision would seem to be doubling down on an already losing proposition.
 
The governor and key lawmakers should be huddling now to map out a contingency plan, pending a court decision. If the court refuses to hear the case and allows the lower court ruling to stand, that plan could be needed very soon….