Of course, the state's share of funding the program would nevertheless be substantial. Because this coverage would relieve some of the current burden on county hospital districts, county indigent health care programs, and other local health entities, a local government contribution to the cost of a Medicaid expansion for working poor parents would be logical. Texas' tobacco settlement proceeds are already dedicated in part to supporting the CHIP program, and the Center for Public Policy Priorities believes that those funds should be dedicated more broadly to ensuring adequate resources to fund full Medicaid participation by children. It is not clear at this time whether adequate funds will remain after these priority obligations are met to make a significant contribution to a Medicaid expansion for working poor parents, particularly since there is a call for additional funding of anti-smoking activities. State are allowed to levy taxes on health care providers to support their Medicaid programs, but only if those are broad-based taxes that apply equally to all providers in a class.
Few states rely on such taxes, and they are of course difficult to pass.
The Center believes that funding a Medicaid expansion for working poor parents is an appropriate use of state revenues. We do recognize that it acts as a government subsidy of low-wage jobs, in effect making the employers' low wages more acceptable to workers. Given the very large budget surpluses that have been expended on tax cuts in the last 2 sessions, we believe that if the state were to make different choices, at least a significant part of this proposed expansion could be financed within current revenues. The lower a firm's average wages, the higher the employee's share of costs for spouse or family coverage. A working parent with children in self-paid day care could qualify with higher income.