Legislative Update 22

June 21, 2008

Dear Friends,

GAO Calls for a Do-over

In February, the Air Force awarded a $40 billion contract to Northrop Grumman to build a new air refueling tanker. These new flying gas stations will replace an aging fleet of tankers that are nearly 50 years old.

In response to a protest by Boeing, Co., the General Accountability Office (“GAO”) found that the Air Force “made a number of significant errors that could have affected the outcome” of the bid process. The Air Force now has 60 days to respond to GAO’s findings which are non-binding.

I had an e-mail exchange with a Northrop Grumman official who remained up-beat. The company believes it offered the most modern and capable tanker for our men and women in uniform. If the Air Force reopens the bid process, Northrop is confident that its KC-45 tanker will outperform Boeing’s KC-767 tanker as it has in 5 global tanker competitions.

Should Northrop Grumman hold on to the contract, assembly for the KC-45 will take place in Mobile. Here’s hoping this proves to be nothing more than a hiccup for Northrop.

Insurance Update

Since last Sunday’s post, I have spoken with State Farm and Insurance Commissioner Chaney about State Farm’s decision not to renew hundreds of policies for homeowners living within 1,000 feet of the coastline. I came out of these conversations with two items that qualify as good news. First, State Farm isn’t mounting a state-wide retreat. An executive explained that Mississippi was the first southeastern state the company wrote policies in and that it intends to continue doing business here. Second, and more to the point, Commissioner Chaney said that he is confident that all residents affected by State Farm’s decision will be able to find coverage through Nationwide, Allstate or one of the other companies who have stepped in to fill the gap.

Commissioner Chaney will be in Pascagoula on Tuesday to speak to the Kiwanis Club. The meeting will be at noon at the LaFont Inn. Consider stopping by to hear what the Commissioner has to say about the future of insurance along the Coast and throughout the State.

Special Session Continues Thursday

The Extraordinary Session reconvenes on Thursday. The primary issue will be finding a funding mechanism for Medicaid. It’s deeply disappointing to me that the options currently on the table consist of a hospital bed tax or a Medicaid program cut of nearly $400 million.

I continue to believe that the most logical and responsible way to address the Medicaid shortfall is with a tobacco and alcohol tax increase. I spoke with a Pascagoula doctor earlier in the week who has over 90 patients in the hospital currently. Of those patients, almost 40 are being treated for illnesses associated with tobacco or alcohol abuse. Our medical professionals know that there is a connection between tobacco usage and healthcare. Our Medicaid program spends $258 million annually to treat tobacco related illness alone.

One of the arguments against a tobacco tax is that the amount raised by such an increase will steadily decline if fewer people smoke. While I believe that a tobacco tax increase has the potential to decrease usage among young people, I do not believe that such an increase will create an appreciable decline of smoking over all. If you don’t believe me, just ask those New York smokers who are shelling out over $9 a pack. But hey, if the American Cancer Society is right and smoking numbers will drop considerably if tobacco taxes are increased, I’m all for it.

While nearly everyone in the healthcare field and the general public believes a tobacco and alcohol tax increase represents the best possible solution to our Medicaid funding woes, the Governor’s veto threat has effectively killed that option. If some of you are shaking your head at the ineptitude of both our executive and legislative branch on this issue, you are not alone. It’s embarrassing to come home and tell folks that the best we can come up with is a hospital bed tax that will leave our own Singing River Hospital System $4 million behind its normal performance range and likely lead to a higher bill on your next hospital visit or major Medicaid cuts that will likely lead to mass layoffs and loss of treatment for hundreds of sick people. It’s sad but that’s exactly where we are.

I’ll be driving up to Jackson on Thursday hoping that a miraculous third way emerges. If it doesn’t and our only option is the Governor’s bed tax or cuts, I’ll probably go with that terrible tax. If anybody has a silver bullet or a solution we’ve been too blind to see, now is the time to pull it out.

How to Contact Me

If you have any questions or concerns, I invite you to call me on my cell phone at 228-326-7649 or e-mail me at bjones@house.ms.gov. Please feel free to forward this report to folks in our district and let me know if I need to add someone to my list.

I will also be posting my updates and House related news on my campaign website at www.electbrandonjones.com.

Thank you for the opportunity to serve.

Brandon