Arizona Legislature

Arizona Gov. Jan Brewer leaves the Arizona House of Representatives floor after she gives her State of the State address at the Arizona Capitol, Monday, Jan. 14, 2013, in Phoenix. (AP Photo/Ross D. Franklin)

Ross Franklin

Not waiting for formal gubernatorial approval, foes of her Medicaid expansion already are moving to undo at the ballot box and in court what they could not block at the Legislature.

Former state Sen. Frank Antenori said he is meeting with attorneys Friday to firm up the language for a referendum on key portions of the law. He needs to get at least 86,405 signatures before Sept. 12 to hold up enactment of the expansion until voters get their say next year.

Antenori is not trying to block what amounts to a $240 million tax on hospitals designed to pay for the program. He conceded that provision is likely exempt from voter review and veto.

But that part of the package is not going to go unquestioned.

Christina Sandefur, an attorney with the Goldwater Institute, is reviewing whether that levy is a tax and not an "assessment'' as Gov. Jan Brewer has contended.

If she believes it is a tax, that would make the levy illegal because it was not approved by a two-thirds margin as required by the Arizona Constitution. At that point, Sandefur said her organization is likely to sue to prohibit the state from collecting it.

That would effectively kill Medicaid expansion because there would be no money to leverage the $1.6 billion a year in federal aid.

The dual preparations are occurring as the Senate on Thursday approved the expansion plan on an 18-11 margin. Five Republicans broke ranks with their other 12 colleagues to join with the 13 Democrats to provide the margin of support.

Sen. Al Melvin, R-Tucson, on the losing end of that vote, said he is counting on the referendum Antenori is sponsoring with Ron Gould, another former state senator, to overturn the legislative action.

"I appeal to my fellow Arizona citizens to sign those petition papers,'' Melvin said.

With the 33-27 House approval earlier Thursday, that sends the measure to Brewer, along with the rest of the $8.8 billion budget for the new fiscal year that begins July 1. The Medicaid expansion, however, would not occur until Jan. 1 when the necessary provisions of the federal Affordable Care Act take effect.

Brewer said she was pleased by the approval, even if it did come over the very vocal objection of a majority of lawmakers from her own Republican Party.

Rep. Eddie Farnsworth, R-Gilbert, referred to her as the "puppet master,'' pulling the strings on the bipartisan coalition of mostly Democrats. And Rep. John Kavanagh, R-Fountain Hills, said Brewer and her allies used "Chicago-style politics'' to get their way.

"In the heat of the moment, people say a lot of things,'' the governor said. "Certainly, I can understand that,'' saying she will just try to "let it go.''

That may prove more difficult in the governor's dealings with Cathi Herrod, president of the Center for Arizona Policy. Herrod, normally an ally, heavily lobbied legislators to add abortion-restriction language to the agreed-upon plan, a move that, had it succeeded, would have blown up the coalition and taken Brewer's Medicaid plan with that.

So miffed was the governor that she publicly tweeted, "It's a sad day when a respected pro-life advocate uses this sacred issue to bludgeon supporters of life-SAVING legislation.'' Brewer said Thursday she was "a little offended.''

"That is a very emotional issue,'' the governor said. "And to use it to bludgeon pro-life supporters because of something else that they want, I think is unfair.''

Herrod refused to discuss the whole issue.

Brewer's next hurdle could be the referendum. But the governor said she is unconcerned.

"I don't think it'll go to the ballot,'' Brewer said. And the governor said even if foes get the necessary signatures to force a vote, she believes the public would uphold it.

Brewer acknowledged, though, a successful petition drive also means that Medicaid expansion could not take place until after the November 2014 election, 11 months after its anticipated start date. "And that would be a shame.''

But gubernatorial press aide Matthew Benson said it won't get that far, contending voters have no right to second-guess this measure.

The Arizona Constitution says that voters, unhappy with something the Legislature has done, may put measures on "hold'' until they get a chance to ratify or reject them at the next general election.

One exception, though, bars referral of measures necessary "for the support and maintenance of the departments of state government and state institutions.'' Benson contends the Medicaid expansion, part of the budget package, fits within that exemption.

But Paul Bender, former dean of the Arizona State University College of Law, said the referendum does not seek to block funding for the ongoing operation of the Arizona Health Care Cost Containment System, the state's Medicaid program.

Instead it would prevent the state from expanding the program. And Bender said voters have an inherent right to review both new and expanded programs.

It's a separate question of whether the "assessment'' on hospitals is a "tax.''

A voter-approved provision of the Arizona Constitution specifically requires a two-thirds vote of both the House and Senate for any tax hike.

There is, however, an exception for "fees and assessments that are authorized by statute, but are not prescribed by formula, amount or limit, and are set by a state officer or agency.'' And Brewer crafted the Medicaid expansion to give the AHCCCS director discretion on how much to assess each hospital to raise the money needed.

But foes of expansion note this is not a fee being levied by an agency to regulate the entity to be taxed but instead a levy on all hospitals, whether they accept Medicaid patients or not, to pay for the program. And Bender said that may make what Brewer is doing more of a tax than an assessment or fee.

Still, he said, it's far from clear.

"It's never been challenged in court,'' Bender said of the constitutional provision.

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