Tax Decisions May Pinch Medicaid Fed Rulings Could Force State to Dip Into General Fund
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Somerset grabs 3 stores making Michigan debuts, Page 4 APRIL 4-10, 2016 Tax decisions may pinch Medicaid Fed rulings could force state to dip into general fund By Jay Greene to boost Medicaid budgets — may [email protected] be coming to an end. Michigan could lose two tax There are two primary reasons sources this year that contribute for this. First, the U.S. Court of Ap- up to $700 million in state general peals for the 6th Circuit in Cincinna- fund revenue used to help support ti this summer could reverse a the state's fast-growing $13.6 bil- 2014 lower court ruling that up- lion Medicaid program. held the state’s 0.75 percent Health AARON ECKELS Over the past 20 years, Michi- Insurance Claims Assessment tax gan has increasingly relied on a on medical claims. hybrid mix of taxes on mostly This HICA tax, if upheld, would health care companies to help raise $300 million next year, which Redening rehabs fund Medicaid, which now covers translates through 2-1 federal about 2.3 million people, or about matching formula into $900 mil- Real estate renovations are going far beyond standard-issue apartment conversions. In Rochester, a 20 percent of the state's popula- lion in state Medicaid funding. tion. The second reason is that the century-old home is transforming into a French restaurant. In Dearborn, the former city hall is now artists’ But this gravy-train arrange- Centers for Medicare and Medicaid ment — providing taxes of up to Services has told Michigan it will space. And in Royal Oak, a pair of architects redeveloped a downtown building into their oce and home. 5.5 percent of premiums or medi- not be able to use funds generated cal claims that the federal govern- by a 6 percent tax on HMO premi- These are what we call “cool rehabs,” and we show them o on Pages 8-10. ment has allowed states to charge ums for federal matching funds health care companies, self-in- sured employers and individuals SEE MEDICAID, PAGE 19 Brat Pops, tickets and trinkets: Sales in uence whether Tigers revenue thrives By Bill Shea game, adding up to several thou- [email protected] Opening Day sand dollars. The Detroit Tigers last week trot- Here’s a rundown of Detroit’s home While that’s not much money ted out the exotic and oddball opener for a team whose record payroll concession items that fans can eat expense this season teeters on the Opponent: N.Y. Yankees during ballgames this season — edge of $200 million, the Tigers including a battered bratwurst Where: Comerica Park may sell enough artery-clogging patty that’s deep-fried and sold on When: April 8; 1:08 p.m. novelty foods to cover, say, catcher a wooden stick for $8. James McCann’s $519,500 salary. They call it a Brat Pop, and de- Either way, it’s revenue. It’s the sale of oddball foods pending on whom you ask, the The team’s executive chef, Mark along with tickets, trinkets, premi- meat popsicle is either peak Mid- Szubeczak of Buffalo, N.Y.-based um seating, suites, apparel, park- western ballpark gastronomy or concessionaire Delaware North ing, programs, corporate sponsor- the lunch special of the apoca- Sportservice, said a few hundred ships, booze and other in-game lypse. such novelty items are sold each ballpark sales that creates millions of dollars of what’s termed local revenue. And local revenue can be a fac- tor in whether Major League Baseball ASSOCIATED PRESS teams thrive or wither compared The Tigers added a starter and an $18 million salary in Jordan Zimmermann, helping to their peers. push the team’s payroll near $200 million. “Sports teams locally — particu- larly in the order of the National ing because their national televi- MLB’s 30 clubs equally share 27 Hockey League, National Basketball sion revenues are far less than the percent of the league’s estimated Association and, finally, MLB — National Football League,” said $9.5 billion in overall revenue, rely heavily on their home game- Rochester sports entrepreneur while the NFL splits 65 percent of day revenue such as concessions, Andy Appleby, who has owned pro tickets, premium suites and park- baseball and soccer clubs. SEE TIGERS, PAGE 21 2 CRAIN’S DETROIT BUSINESS // APRIL 4, 2016 reposition some of its brands for the improvement plan. NMU wants to MICHIGAN nation’s largest demographic. spend about $100 million to build INSIDE As fewer people eat cereal for modernized housing and dining THIS ISSUE .........................................14 breakfast, Kellogg is trying to boost facilities, The Mining Journal of CALENDAR CLASSIFIED ADS ...............................17 sales of its cereals with campaigns Marquette reported. DEALS & DETAILS .............................15 that encourage consumption of ce- Ⅲ is making chang- Bell’s Brewery OPINION ..............................................6 real throughout the day, including es to its packaging and logo. Offi- OTHER VOICES ................................... 7 as snacks and for dinner, Bloomberg cials of the Kalamazoo area-based PEOPLE ...............................................16 BRIEFS reports. “It’s an alternative to a salty company said the plans will roll RUMBLINGS ......................................22 Flint ocial: State overruled ered a run for the White House, to or savory snack in the evening when out later this year, MLive.com re- WEEK ON THE WEB .........................22 city decision to treat water the top of Fortune’s list of the world’s you’re looking for a little TV time,” ported. The new packaging will most disappointing leaders. As For- said Craig Bahner, president of Kel- display more prominently fan fa- An official with Flint’s water plant tune says: “Good fortune can quick- logg’s U.S. Morning Foods division. vorites like the Two Hearted Brook COMPANY INDEX: said last week that he had planned ly turn sour after one bad decision, The shift to 24/7 breakfast foods Trout and the Oberon Sun. SEE PAGE 21 to treat the drinking water with an- and repeatedly making poor deci- has helped other companies, includ- Ⅲ A new currency parity policy is ti-corrosive chemicals after the city sions can only make matters worse.” ing Illinois-based McDonald’s Corp. Its taking effect for the Blue Water Canada paying with Canadian began drawing from the Flint River Fortune assembled the list of U.S. revenue and profits have surged Bridge, which spans the St. Clair currency. The Canadian currency but was overruled by a state envi- business and government leaders since last fall, when it began offering River between Port Huron and Sar- rate for eastbound traffic will be ronmental regulator. worldwide, then asked readers who some popular morning items all day. nia, Ontario, AP reported. The Mich- reviewed and adjusted either up or Mike Glasgow, then a supervisor at is the most disappointing. Snyder igan Department of Transportation down on April 1 and Oct. 1 of each the plant and now municipal utilities led late last week, trailed by Martin MICH-CELLANEOUS said the change is starting for mo- year. Details of tolls for crossing administrator, said he received the in- Shkreli, founder and former CEO of Ⅲ A $380 million development torists traveling from the U.S. into the bridge are posted online. Ⅲ struction from district engineer Mike Turing Pharmaceuticals; New Jersey in Lansing is expected to include Prysby of the Michigan Department of Gov. Chris Christie; and Chicago two boutique hotels, a medical of- Environmental Quality at a meeting to Mayor Rahm Emanuel. Others on fice building, restaurants and Corrections discuss the final steps before Flint the list: Sepp Blatter and Michel Pla- housing. Construction on the Red switched from the Detroit water sys- tini, former FIFA chiefs; Martin Win- Cedar Renaissance project is sched- Ⅲ A story on the “Pure Michigan” marketing campaign in the tem as a cost-saving measure in April terkorn, ex-chairman of Volkswagen; uled to begin June 1, Joel Fergu- March 28 issue misattributed the following quote: “Social media 2014, The Associated Press reported. and Marissa Mayer, CEO of Yahoo. son, president of Lansing-based has provided an opportunity for people to vent and to share their Glasgow said Prysby told him a year of Ferguson Development, told the thoughts, but unfortunately, more times than not, it’s not bal- water testing was required before a Froot Loops an all-day Lansing State Journal that the anced with the positive. Every bad message in a marketplace is decision could be made on whether project will be “a game changer” just helping create distractions for the good things we’re trying to corrosion controls were needed, treat? Kellogg hopes so for Lansing and nearby East Lan- say. If that positive information outweighs the negative, then which the DEQ has since acknowl- Millennials aren’t supposed to sing and “a catalyst for other activ- we’re going to be ahead of the game.” It should have been at- edged was a misreading of federal reg- like breakfast cereal all that much, ities.” Plans include 129 townho- tributed to Identity President and founding partner Mark Winter. ulations on preventing the lead and dismissing it as too sugary, too pro- mes and student housing that can Ⅲ The year-created date for University of Michigan spinoff Praktio copper pollution that reached some cessed and inconvenient. But they accommodate 1,200 people. LLC in the list of university spinoffs in the March 28 edition should homes, businesses and schools. also are embracing the likes of Froot Ⅲ Northern Michigan University have said 2014. Meanwhile, the ongoing Flint wa- Loops and Smorz as indulgent plans to upgrade its campus in Ⅲ The headline on a March 28 story about Lycera Corp.