ENID —

 

By TIM TALLEY

Associated Press Writer

OKLAHOMA CITY (AP) — The Oklahoma Supreme Court struck down a law Tuesday intended to raise about $78 million for the state’s Medicaid program, ruling that lawmakers violated the state Constitution’s revenue-raising requirements when they approved the plan in May.

In a 6-3 decision, justices said the law is unconstitutional because it did not receive the three-fourths supermajority vote in the House and Senate that is required to raise new taxes. The law was passed during the last five days of the legislative session, which also violated rules for approving new taxes.

The decision, filed a day after the high court heard oral arguments in the case, is a victory for Commissioner of Insurance Kim Holland. She challenged the fee statute in a lawsuit filed against the Oklahoma Health Care Authority, the state’s Medicaid provider and other state agencies last month.

“Today’s decision is a victory for all Oklahomans who believe that our Constitution is worth upholding,” said Holland, whose office would have been responsible for collecting the fee.

She said the provisions of State Question 640, a constitutional amendment passed in 1992, requires that revenue-raising issues either be decided by voters or by a supermajority vote of the Legislature.

The law, which was scheduled to go into effect Friday, called for a 1 percent fee on claims paid by private health insurers and companies with self-insured health care plans. The fees would support Medicaid, which provides health care to low-income and elderly residents.

Supporters have said the measure would have raised $78 million in new revenue for state coffers. With federal matching dollars, the fee would have raised about $240 million for the state’s Medicaid program.

In a dissenting opinion, Justice Marion Opala of Oklahoma City said he would have sent the case to a district court to determine if the revenue bill “was in fact a true tax.” Justice Rudolph Hargrave of Wewoka agreed. In a separate dissent, Justice John Reif of Skiatook said he believes the fee “is a constitutionally permissible fee related to the provision and regulation of health insurance in the state of Oklahoma.”

Invalidating the measure means the state will lose a revenue source as it struggles to pull out of a budget crisis, said Gov. Brad Henry’s spokesman, Paul Sund. Funds approved by Congress for state health care needs should help Oklahoma avoid disruptions in health care programs during the fiscal year that began July 1, Sund said.

“However, because those federal funds are one-time dollars that must be replaced by the state next fiscal year, Oklahoma will face significant funding challenges in health care and other important programs when the Legislature returns in 2011,” he said.

The measure’s principal author, Republican Rep. Doug Cox of Grove, said the measure may eventually be decided in a public referendum.

“Next year, we’re going to have to address this from a legislative standpoint,” said Cox, an emergency medicine physician at Integris Grove General Hospital.

The ruling was praised by The State Chamber, a business and industry group, and state lawmakers who agreed with Holland.

“This is a big relief to the business community as it would have added millions of dollars to our bottom-line costs and may have threatened the ability of employers to provide health care to their workers,” said Fred Morgan, president and CEO of The State Chamber.

Rep. Ken Miller, R-Edmond, chairman of the House Appropriations Committee, said he voted against the fee measure and believed it was a tax that fell under the provisions of State Question 640.

“It was also poor policy to increase the tax burden on Oklahoma families and businesses, especially during a global recession,” Miller said.