Idaho’s Veterans Services sitting on $31 million

BOISE – Lawmakers, veterans officials and Gov. Butch Otter are grappling with how to spend a $31 million stash of cash at the Division of Veterans Services that’s been growing in recent years because federal reimbursements have exceeded Idaho’s costs of caring for military members.

Idaho Veterans Services administrator David Brasuell told the Associated Press Friday he’s submitted a plan to draw down the money, but details won’t be released until Otter’s budget becomes public Jan. 9.

“The federal government believes that our accounting of the money is appropriate,” Brasuell said, adding other states’ veterans programs likely face similar cash surpluses.

Wayne Hammon, Otter’s budget director, declined to comment Friday on how the money will be spent.

Veterans Services collects more money than it costs to care for clients because federal rules exclude payments from the U.S. Department of Veterans Affairs from calculations of the costs billable to Medicare and Medicaid.

Both Medicare and Medicaid help pick up the tab for veterans, including some 300 residents of Idaho’s veterans nursing homes in Lewiston, Pocatello and Boise.

In 2007, the cash balance at Veterans Services was $12.6 million. By Dec. 31, 2010, it had risen to $27 million, and Brasuell said it swelled to $31 million by this month.

In mid-2011, state Legislative Services auditors poring over his division’s financial books concluded there were likely no restrictions on its use.

“No liability exists to the federal government or any other entity,” auditors wrote. “We recommend the division initiate a discussion with legislative and executive leadership to develop a formal plan.”

There were discussions during the 2011 Legislature, including between leaders of Idaho’s budget writing committee, Sen. Dean Cameron, R-Rupert, and Rep. Maxine Bell, R-Jerome, as well as Idaho House of Representatives leaders like Majority Leader Mike Moyle, R-Star, over how the money could be deployed.

At the time, lawmakers and Otter were sweeping as many state accounts as possible for available cash, in hopes of offsetting a looming budget shortfall.

But Moyle argued against tapping the Veterans Services money, contending Idaho couldn’t count on receiving it year after year. So-called “one-time money” shouldn’t be used to prop up programs like Medicaid, he argued at the time.

“We should not use one-time money to fix ongoing problems, especially when there was concern that the economy was going to get worse,” Moyle told the AP earlier this year.

House Health and Welfare Committee Chairwoman Janice McGeachin, R-Idaho Falls, said she would have liked to have known about the Veterans Services money as she and her Senate counterpart, Health and Welfare Committee Chairwoman Patti Ann Lodge, R-Huston, sought to trim Medicaid spending to close a budget gap.

“I agree with Rep. Moyle’s philosophy, that we should not be propping up ongoing expenses with one-time money,” McGeachin said in an interview over the summer. “But it’s hard for me to say what we could have done with that money, not knowing it was there. We should have been made aware of it.”

Minority Democrats say they, too, would have liked to have been included.

“I was unaware (of the money) at the time,” said Sen. Dan Schmidt, D-Moscow and a medical doctor. “If we’d known about it, it could have been a part of a healthy health care policy discussion.”

Last week, Cameron told the AP there are a number of potential options for the 2012 Legislature to consider.

The cash balance money could go toward fixing up Idaho’s three veterans homes, Cameron said. In addition, a portion could also be used to shore up Medicaid-funded services, especially for elderly people at nursing homes who could include those with military experience.

“That would be a high priority: Any type of minimizing of past reductions – or current reductions to Medicaid or nursing homes – any of those services that we’ve reduced right to the edge,” he said.