Discussion Question

1. For this assignment, you will participate in the discussion with your classmates. APA format, the initial response requires a minimum of 2 scholarly references (textbook included). Textbook: Story, N. M., (2021). Milstead’s health policy and politics (7th ed.). Jones & Bartlett Learning

Chapter 6: Discussion Question – answer all the questions for the case.

When Policy Implementation Is Rejected by Citizens: Reinstatement of the Medical Expenses Deduction on North Carolina State Income Taxes

In 2013, the North Carolina General Assembly overhauled the state’s tax code, which had been in effect since the 1930s. The proposed plan eliminated several deductions from individuals’ state income taxes. The initial proposal eliminated deductions for mortgage and property taxes, contributions to nonprofit organizations, medical expenses, long-term care insurance, government and private retirement income, and contributions to the NC 529 college savings plans. To offset eliminating these deductions, the proposal increased the standard deduction for single people from $3,000 to $7,500 and for married couples filing jointly from $6,000 to $15,000. Lobbyists for realtors and nonprofit organizations persuaded the legislature to keep their deductions, although mortgage and property tax deductions were limited to $20,000. Senior citizens did not have anyone lobbying and most of the eliminated deductions affected them.

N.C. General Assembly’s fiscal research staff forecasted that taxpayers across all categories would slightly reduce their tax burden. However, they also acknowledged that those 65 and older might pay more because several categories affected them. In contrast, N.C. Budget and Tax Center said those taxpayers making less than $84,000 would pay more in taxes. The majority of citizens 65 and older are in that category.

The legislation took effect in 2014. It turned out that almost all senior citizens suffered sticker shock when they filed their 2014 state income taxes. On average, their income tax increased by $1,800. That summer, the North Carolina Continuing Care Residents Association (NorCCRA) created a legislative committee and organized a letter-writing campaign for members of the House Appropriations Committee. Because nothing could happen in the 2014 short legislative session to remedy the perceived problems. The campaign was an educational piece letting legislators know that residents would be back in the 2015 session seeking to reinstate the medical expenses deduction.

Sindy Barker, chair of the newly formed statewide Legislative Committee, had retired in 2006 after spending 19 years lobbying N.C. General Assembly on behalf of the North Carolina Nurses Association. Her knowledge of successfully lobbying for nursing issues enabled the NorCCRA Legislative Committee to develop a systematic plan for approaching the 2015 General Assembly members.

Questions were raised about whether an organization that had never lobbied before could pull together a successful lobbying effort, especially when there did not appear to be much support for its issue among members of the General Assembly. When HB46, Senior Tax Deduction for Medical Expenses, was introduced, the Fiscal Research Division said the state would lose $37.9 million in revenues from this deduction in 2015 alone. That forecast escalated to $44.1 million by the fiscal year 2019–2020. Moreover, this loss to state revenues assumed that the deduction was reinstated only for citizens age 65 and older.

Members of the General Assembly understood that a high percentage of senior citizens vote and that retired individuals also have more time to contact their legislators. Over several months, the 20,000 residents living in continuing care retirement communities (CCRCs) in North Carolina were asked to write 650 individual letters or emails to the following legislators:

■    The 15 members of the House Committee on Aging explained the bill and then thanked them for a favorable report

■    The 74 members of the Republican Caucus

■    The 42 members of the House Committee on Finance

■    The 81 members of the House Appropriations Committee

■    All 120 Members of the House, thanking them for including the medical expense deduction in the budget

■    The 50 Members of the Senate, asking them to have the medical expense deduction in their version of the budget

■    The 83 members of the Budget Conference Committee, asking them to support the House version of the deduction with no cap

■    The 170 members of the General Assembly thanked them for reinstating the medical deduction in the final budget

One CCRC held a letter-writing party and sent 1,761 letters in one day. Several put out petitions for their residents to sign and then forwarded those letters to the appropriate legislators. The typical petition contained upward of 150 signatures. Members of the General Assembly soon realized this was an issue dear to the heart of many of their regular voters.

Ms. Barker, the Legislative Committee chair, brought her husband in a wheelchair to the General Assembly when she appeared before committees. He became the face of what “high medical expenses” look like. The issue made the front page of several major state newspapers and was featured in online stories and local newscasts.

By the end of March 2015, NorCCRA had been joined in its campaign by AARP, N.C. Retired Government Employees and organizations that represent children and adults with chronic diseases and disabilities. This coalition meant more letters, emails, and phone calls to legislators. In one week in April, they achieved more than 7,000 contacts or approximately 40 contacts per legislator.

When the medical expenses deduction reinstatement was included in the House budget toward the end of May, the policy advocates were halfway home. It was not a smooth ride, but the medical expenses deduction was reinstated in the final budget passed by the General Assembly by the middle of September.

The medical expenses deduction was reinstated for 2015 taxes, so 2014 was the only year with a higher increase. NorCCRA conducted another survey in 2016 following income tax filing in the spring. The average tax bill for senior citizens was $1,400 less than the previous year. The other deductions eliminated in 2013 remain in place, but the one with the most significant impact was the medical expenses deduction. Members of the General Assembly again received thank-you letters from NorCCRA, letting them know what a difference their legislation had made.

Answer the following Discussion Questions:

  1. How can legislation with such negative consequences for a large group of citizens be prevented or stopped?
  2. Using what you have learned about the policy process model, where do you think N.C. General Assembly “went wrong” with the policy to gain more taxpayer revenue?
  3. Once the legislature passed the original policy to eliminate specific tax deductions, which steps in the implementation process might have prevented the backlash by citizens?

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