Medical Groups Challenge State’s Money Grab

     PHOENIX (CN) – Arizona unconstitutionally swiped $13 million from medical regulatory boards and threw it into the general fund to try to balance the state’s sick budget, more than a dozen groups of medical professionals say in Maricopa County Court. The money came from licensed medical workers, is not a tax, and the governor and Legislature have no right to divert it, the groups say.




     Plaintiffs says Arizona House Bill 2620, which then-Gov. Janet Napolitano signed into law on April 18, 2008, stole $8.5 million: $4.2 million from the Arizona State Board of Dental Examiners, $2.5 million from the Arizona State Board of Pharmacy, $1.4 million from the Arizona Medical Board, $250,000 from the Arizona Board of Osteopathic Examiners, $100,000 from the Arizona State Board of Physical Therapy, and $75,000 from the Arizona State Board of Nursing.
     The money in all these funds “consists entirely of regulatory fees paid by licensees of the respective regulatory boards (‘Boards’) some of whom are also members of plaintiffs, [who] pay regulatory fees to fund the various boards whose missions, while varying in specificity, are to protect the public health and safety by licensing and regulating their respective professions,” according to the complaint.
“The funds are not, and never were, part of the General Fund, which is composed of all monies received into the state treasury except those monies designated by law for other statutory funds. … The transfer of funds converts monies paid by the respective licensed individual plaintiffs (‘Licensees’) for services, including regulation and oversight, into a tax that is placed in the General Fund to be used for purposes other than the purposes for which it was paid.
     “The transfer of funds is an additional tax on the licensees who have already paid all properly assessed state taxes,” according to the complaint.
A second bill, HB 2209, swiped $4.7 million from these funds: $1.5 million from the Arizona State Board of Dental Examiners, $1 million from the Arizona State Board of Nursing, $610,000 from the Arizona State Veterinary Medical Examining Board, $550,000 from the Arizona State Board of Pharmacy, $541,000 from the Arizona Board of Osteopathic Examiners, $240,000 from the Arizona Board of Occupational Therapy, $186,000 from the Arizona State Board of Optometry, and $67,000 from the Arizona Board of Chiropractors Examiners.
Neither bill passed by two-thirds vote, which also was unconstitutional, according to the complaint.
     Plaintiffs seek declaratory judgment and want their money back. Their lead counsel is Roger Morris with Quarles & Brady.
     A similar challenge was filed recently in Connecticut, where the Legislature and governor swiped millions from a Connecticut Bar Association fund to try to shore up a multibillion-dollar budget shortfall. The Bar sued and results of the money grab are still up for grabs.

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