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VOL. 129 | NO. 144 | Friday, July 25, 2014

Wharton Sticking to Budget Plan Without Tax Hike

By Bill Dries

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Memphis Mayor A C Wharton Jr. knows there’s a push coming for a city sales tax hike referendum to reverse health care insurance cuts approved by the Memphis City Council in June.


He knows that because he was at the meeting with municipal union leaders Tuesday, July 23, in which those hosting the meeting, the Memphis chapter of the Southern Christian Leadership Conference, said they back the union leaders’ call for the referendum. And they are expected to take that call to the council next month.

But Wharton insisted, with some qualifications, Wednesday that he continues to try to close the books on the budget and the health insurance changes that are part of it.

“We’ve got it pretty well nailed down, but we simply have not communicated the way we should,” Wharton said. “I’m focusing on one thing, and that’s implementing the plan and making sure we have the safety net.”

The qualification Wharton made, however, is if the council approves a referendum ordinance.

Until or unless that happens, Wharton said, he and his administration are deep into the complexities of the “safety net” to help some retirees eligible to buy coverage in the federal health insurance exchange. That safety net could include some form of subsidies or other help from the city, either to supplement or point the way to federal subsidies.

That became more complex this week with one ruling from a federal appeals court that held the federal subsidies in the form of tax credits are only available in states that have a state-run exchange. Another federal appeals court ruled the same day that the subsidies are available whether the exchange is state-run or run by the federal government. Tennessee’s exchange is run by the federal government.

Wharton said the rulings and the virtual certainty of an appeal to the U.S. Supreme Court could impact the city’s move to more employees and retirees going to the exchange with the end of city government’s subsidies.

“It does not mean that the Affordable Care Act could not be by executive order or whatever – funds may be redirected from one pool to another, as the president has done,” Wharton said. “I have to work on the assumption that unless it’s stricken … that it’s the law of the land. If somewhere down the road it changes, then we will act accordingly.”


In Memphis Wednesday, Tennessee Gov. Bill Haslam expressed some sympathy for the financial challenges Wharton is facing.

“Everybody is facing it, just to different degrees,” said Haslam, a former mayor of Knoxville. “People tend to get mad at the current political leaders who are having to deal with the reality. Maybe the question is for people who made promises years ago that can’t be delivered on now.”

Haslam also agreed that the conflicting court rulings are likely headed to the U.S. Supreme Court to be resolved.

“I’m not certain it really impacts it one way or another,” Haslam said of his continued work to reach a compromise with federal officials on an expansion of Medicaid funding to cover uninsured Tennesseans.

He met in June in Nashville with Sylvia Mathews Burwell, the new U.S. Health and Human Services secretary, picking up talks that began with her successor, Kathleen Sebelius.

Haslam said there has been some progress but declined to be more specific.

“I know it feels like … we’re not getting anywhere,” he said. “If it was easy to get something approved in Washington that we could pass in Nashville, we would have done it a while ago. But it’s not. The reality is it’s a difficult task.”

Haslam has said any compromise plan for a Medicaid expansion would have to be approved by the Tennessee Legislature, which passed a law earlier this year requiring such an approval.

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