Saturday, February 10, 2007

What's Missing From The Debate: The Financial Impact of SJR-7

Indiana Senate rules require all bills filed in that body to be accompanied by a fiscal impact statement. A proposed constitutional amendment to permanently alter the social landscape in Indiana could have significant, long-term costs for the State, but lawmakers will cast a vote on this proposal for the second time in order that it may be sent to voters for approval without the benefit of knowing its financial impact. SJR-7 limits marriage to the union between one man and one woman. A second part of SJR-7 goes well beyond a ban on same-sex marriages. It will also prevent Indiana law from conferring the legal incidents of marriage upon unmarried couples or groups. The second part of the constitutional amendment will have the effect of blocking Indiana from conferring the right to civil unions or domestic partner benefits to same-sex couples in the future.

Passage of SJR-7 will have its most immediate impact on public university workers at IU and Purdue where same-sex couples currently enjoy domestic partner benefits, such as health insurance, just like their opposite-sex couple counterparts enjoy. A plain reading of SJR-7 instructs us that Indiana law may not be construed to confer the "legal incidents of marriage" upon "unmarried couples." A Michigan Court of Appeals ruling last week instructs us that domestic partner benefits for public employees is construed as a legal incident of marriage--a right limited to only married, opposite sex couples under Michigan's constitutional amendment limiting marriage to the union of one man and one woman.

Beyond public sector workers, SJR-7 would also forever bar Indiana from formally recognizing domestic partner benefits or civil unions statewide. Several states which bar same-sex marriages, such as California, extend all of the state-level rights and responsibilities of marriage to domestic partners. Other states, including Connecticut, Vermont and New Jersey, allow civil unions between same-sex couples, which similarly confer the rights and responsibilities of marriage to same-sex couples.

Depriving same-sex couples or domestic partners these benefits will have significant long-term costs to the State of Indiana in terms of the accompanying costs of the uninsured and public benefit programs. Health insurance is an extremely important form of compensation offered by employers. It is estimated that nearly 70% of all employers offer their employees health insurance coverage in some form. SJR-7 permanently ensures that same-sex couples will be at a distinct disadvantage in obtaining health care coverage over their opposite-sex counterparts. This will contribute to the serious problem of the uninsured in Indiana. While several major employers in Indiana, such as Eli Lilly, Cummins and Well Point, extend domestic partner benefits to employees' same-sex partners, the vast majority do not provide this benefit.

Gov. Mitch Daniels is proposing a tax increase of at least 25 cents per pack on cigarettes to help finance health insurance for the state's most needy uninsured. One of the motivations for making sure everyone has health insurance is to reduce the demand for means-tested benefit programs, such as Medicaid, which uninsured persons often have to tap when they are stricken with catastrophic medical expenses they are otherwise unable to afford. In cases where a person is ineligible for Medicaid and other government assistance, the costs are simply passed on to others because the bills go unpaid. A 2006 study by Ash & Badget shows that people with unmarried partners either same-sex or different-sex partners-are much more likely to be uninsured or on Medicaid than are married people. One in five people with a same-sex partner are uninsured. Offering domestic partner benefits to same-sex couples achieves two objectives: it reduces the number of uninsured, and it reduces the costs of means-tested benefit programs by shifting employees to private pay plans.

A study performed by the University of California by Bradley Spears for the State of California bore out this analysis when the legislature there passed a law extending domestic partner benefits to same-sex couples. It showed a positive impact on the state's budget ranging from as little as $5.8 million dollars to $155.4 million dollars each year by decreasing the number of people who are eligible for means-tested benefits programs. The California law was also projected to increase income tax revenues from domestic partners who would no longer be allowed to file individually as a head of household.

So yes, SJR-7 will impact more than who has right to marry in Indiana. It will further relegate unmarried couples, both straight and gay, to second class status. It ensures there will be more uninsured persons living in Indiana, and it ensures there will be more people dependent upon government benefit plans for their survival. There's a huge social cost to SJR-7--one that is being conveniently ignored by our state lawmakers, who seem more interested these days in scoring political points with the religious right than enacting sound public policy that will benefit the long-term interests of the people of our state.


Wilson46201 said...

Good post! With many a legislator, when you got them with their billfold, their hearts and minds will follow!

Anonymous said...

I totaly agree with wilson46201 that if it will save the state money then we will get the laws we want. It is crazy to let people go on public assistance when there are insurance to provide coverage for them.

Anonymous said...

Excellent argument.

Hear that, IE? See how easy it was?

Anonymous said...

I hope this reaches the "powers that be."

Good post.