Proposal 5 is one of six statewide ballot proposals that will be on the ballot in Michigan on November 6. Proposal 5, also known as the two-thirds amendment, calls for a permanent and extreme change to the Michigan constitution that would create a fiscal disaster for our state, and put the health and well-being of our neighbors at risk.
What is Proposal 5?
Proposal 5 requires a two-thirds majority vote of the State House and State Senate, or a statewide vote of the people at a November election, in order for the State of Michigan to impose new or additional taxes, expand the base of taxation, or increase the rate of taxation. If passed, Proposal 5 would give a minority of state legislators the power to prevent a tax change that an overwhelming majority of the other state legislators view as necessary.
How Would Proposal 5 Impact Michigan’s Health Care System?
Proposal 5 is particularly concerning for Michigan’s health care system, including Michigan Health Centers and the patients they serve, because it threatens funding for Medicaid and other health care services.
One of Medicaid’s largest provider networks is comprised of Michigan Health Centers, which serve over 12% of Michigan’s Medicaid population. Michigan Health Centers are required to treat all patients who come through their doors regardless of income or insurance status. One way to cover the cost of caring for the uninsured while continuing to ensure access to care for other patients is to maintain a Medicaid system with enough funding to cover the state’s most vulnerable populations, including low-income children, senior citizens, and the disabled.
Currently, Michigan’s Medicaid program is paid for in part by the Health Insurance Claims Tax, which the State Legislature passed in 2011. This 1% tax on all claims is designed to raise $400 million and be matched by $800 million more in federal funds, generating a total of $1.2 billion in revenue for the state. The Claims Tax expires on January 1, 2014, but is expected to be reapproved by the majority of the State Legislature at the end of 2013. However, if Proposal 5 passes, the tax would need to be approved by a two-thirds majority, which is unlikely. That would result in a $1.2 billion hole in Michigan’s Medicaid system and reduce access to health care for many vulnerable residents across the state.
What Are Other Consequences of Proposal 5?
Proposal 5 has other serious consequences beyond just health care. It would make it nearly impossible for the State Legislature to ever pass a state tax or major tax reform again to balance the state budget. Lacking the ability to adjust state taxes to fit current circumstances would shift costs to the local level, resulting in higher local taxes and more cuts to essential public services that protect the well-being and safety of our families, like health care, education, roads, and public safety. Other states where similar proposals have passed have experienced worse credit ratings, leading to higher bond expenses to build or maintain roads, bridges, schools, and other capital projects.
Who Opposes Proposal 5?
Because proposal 5 is so extreme, and because it would create so many devastating consequences, diverse groups across Michigan are uniting to oppose it, including health care organizations, business leaders, labor unions, Republicans, Democrats, seniors, educators, mayors, and police officers. They are all are urging NO on Proposal 5—and Michigan Primary Care Association is, too.
Who Supports Proposal 5?
Three out-of-state billionaires and corporations owned by a single Detroit billionaire, Matty Moroun, are spending millions of dollars trying to buy Proposal 5. If Proposal 5 passes, they would be able to forever protect tax breaks that benefit them and other special interests.
What Can You Do?
Vote NO on proposal 5, and encourage others to also vote NO. Forward this email to other registered Michigan voters. Click here for talking points that explain how Proposal 5 is bad public policy for Michigan—please print and share them with Michigan Health Center patients, board members, staff, partners, and family and friends. For more information visit VoteNoOnProp5.com.