As Sen. Mike Enzi and other national lawmakers negotiate a final tax bill, Wyoming education and health officials warn that some possible provisions could have a negative effect on schools and hospitals here.
“Overall I think it’s a pretty tough way to go about undoing the Affordable Care Act,” Eric Boley, who runs the Wyoming Hospital Association, said of the provision in both the Senate and House tax bills that would eliminate the individual mandate, which requires people buy health insurance or face a penalty. “It’s a workaround. I don’t really see what it has to do with taxes. I don’t think they’re addressing the issue of making it better.”
“I think it would be a real hardship on graduate students at the University of Wyoming today and graduate students going forward,” Chris Boswell, UW’s vice president for community and governmental affairs, said of the House bill’s provision that would tax graduate student’s tuition waivers as income.
In recent weeks, both the U.S. Senate and House passed tax reform legislation. Both would provide steep tax cuts for businesses and more modest tax breaks for families and individuals. The tax cuts in each bill add up to about $1.5 trillion over the next decade.
Wyoming’s congressional delegation — Enzi, Sen. John Barrasso and Rep. Liz Cheney — each supported their chamber’s tax bill.
In statements, Barrasso, Cheney and the spokesman for Enzi praised the legislation.
“Under the bill, (Enzi) believes Wyomingites would generally see their taxes simplified, lower tax rates, increased wages, more jobs in their communities and a stronger economy,” Enzi’s spokesman, Max D’Onofrio, wrote in an email statement to the Star-Tribune.
Enzi is one of a handful of senators selected by Senate Majority Leader Mitch McConnell to meet with House members and negotiate a final tax bill.
Axing the mandate
Among other things, the Senate bill would eliminate the individual mandate, one of the most controversial parts of the Affordable Care Act. Republican lawmakers tried for much of this year to roll back the bill but ultimately failed earlier in the fall.
The nonpartisan Congressional Budget Office has said that repealing the mandate will result in 13 million fewer people possessing health insurance in the coming years. It would also provide about $338 billion in revenue over the next 10 years.
Cheney, Barrasso and D’Onofrio all praised the Senate’s proposed repeal of the mandate.
“It takes Obamacare from being a mandatory program to a voluntary program,” Barrasso said in a statement. “This will give additional relief to low- and middle-income families.”
D’Onofrio noted that should the mandate be repealed, it wouldn’t eliminate Americans’ ability to obtain subsidies to help pay for insurance.
But Boley — who has criticized parts of the Affordable Care Act — said the elimination of the mandate would destabilize the insurance exchanges and cause prices to jump.
“They’re not really addressing the overall issue and not coming up with an overall solution,” he said of lawmakers. “They’re just dismantling it piece by piece.”
Affecting students and teachers
The bills also have notable implications for education. The House bill would tax the tuition waiver that many graduate students often receive as income. For instance, Rachel Edie — an atmospheric science PhD student at UW — currently has her tuition covered by her department. Should the House’s bill provision become law, that tuition would be treated as income on which Edie would have to pay taxes.
“It feels very — I don’t know — hostile toward higher education,” Edie said.
According to UW’s website, masters students receive an average stipend of $19,987.46 for about nine months worth of work. PhD students like Edie receive an average of $24,694.46.
She said that going back to graduate school meant setting aside a career — and the salary it would bring.
“We’re making way less money than our peers generally because we’re making maybe 20 grand a year,” she continued. “So we’re kind of setting ourselves back in that respect. ... I think if I were just considering going to graduate school and the price tag were a lot higher and departments couldn’t offset it by offering higher stipends, I think it would” deter her from going.
Boswell said the university has spoken with its delegation about its concerns with the tuition waivers. He said UW President Laurie Nichols ran into Enzi in an airport and spoke with him.
“We are not passive on this,” Boswell said.
He said the university was simultaneously most concerned with taxing tuition waivers and most hopeful that particular provision won’t make it into the final bill.
The tuition waivers were not the only provision affecting higher education. The House version would also eliminate the tax deduction that can be taken by paying student loan interest, Boswell said. Essentially, those with student loans can deduct a certain amount that they pay on the interest of those loans.
Barrasso said he supported keeping both that deduction in place and tuition waivers untaxed. Cheney responded to a list of detailed questions with a statement, and her spokeswoman did not respond to a follow up question about whether the representative supported taxing tuition waivers.
D’Onofrio, Enzi’s spokesman, said he would leave comments on the House bill to House members and that “he is not going to negotiate the different provisions of the tax bill through the media.”
The bill has implications for K-12 education, as well. The House’s bill would eliminate the $250 deduction teachers can take for spending their own money on school supplies, while the Senate would double the amount they can deduct.
Kathy Vetter, the president of the Wyoming Education Association, said the $250 current deduction is already less than the more than $500 the average teacher spends on school supplies each year.
She said that while eliminating the deduction would keep more money out of teachers’ pockets, it wouldn’t stop them from trying to help students.
“I don’t think it will significantly affect the amount of money that teachers spend,” Vetter said. “I don’t believe they spend it because they get a tax deduction. Teachers spent that money because they believe in students.”
Barrasso said he supported “ensuring teachers who spend their own money on classroom supplies receive a tax deduction.”
Fear of future cuts
Vetter and Boley both said they were concerned that a final tax bill — which could add more than a trillion dollars to the federal deficit — will result in cuts to Medicaid, Medicare and other entitlements.
“We have a lot of children that live in poverty and they rely on those government services to insure that they get their health care and all of the food and everything,” Vetter said. “This tax bill raises the deficit and then consequently they may cut services, that really does affect our children.”
The concern has been raised by the media and opposing lawmakers, who say that Republican lawmakers will turn to slashing entitlements to pay for the cuts that will come from the tax bill.
Medicare’s giant fund for inpatient care isn’t expected to start running out until 2029, more than a decade away. But an anti-deficit law currently in effect could trigger automatic cuts as early as next year — about $25 billion from Medicare.
McConnell, the Senate majority leader, has denied this, and Barrasso noted that the tax bill itself does not cut Medicaid, Medicare and other entitlements.
But he said that if “we want to get serious about the debt, we must cut wasteful spending, shrink the federal government and permanently strengthen critical programs like Medicare, Medicaid and Social Security.”
The Associated Press contributed to this report.