AzDA joins lawsuit against state

Phoenix鈥擟laiming unconstitutional taxation, the Arizona Dental Association and 12 other health care associations sued the state for recovery of more than $13.2 million swept from professional licensing boards for budgetary reasons.

The state dental board took the hardest financial hit, according to the suit filed April 8 in Maricopa County Superior Court.

“Our members were definitely upset about the sweeps,” said Dr. Regina Cobb, dentist plaintiff and AzDA president when the suit was filed. “We feel we were double taxed.” The Arizona State Board of Dental Examiners “can’t really do their normal investigations,” she said. “They’re just running on a shoestring right now. Professionally, I think all of us were harmed.” Dr. Cobb practices in Kingman.

Kevin Earle, AzDA executive director, said the Arizona legislature took $5.6 million from the dental board in April and June 2008 sweeps and transferred monies swept from the various licensing boards to the state’s general fund. The funds consist entirely of fees paid by dental, dental hygienist, medical, nursing, pharmacy and other licensees and must be used for running the state boards, licensing professionals and conducting investigations and other necessary business.

“Our members pride themselves on being trusted caretakers of their patients’ health,” said Mr. Earle. “A vital and effective regulatory structure provided by the boards adds confidence to patients and the public at large. These boards need funding to survive.” Before assuming the AzDA post in September 2008, Mr. Earle directed the state dental board.

Although the funds were taken last year, the operational impact heightens as the state fiscal year ends, said Mr. Earle. “It looks like the dental board will have only $60,000 going into fiscal year 2010, which begins July 1, not nearly enough to make their full payroll,” he said. “Come September or October that’s when they go negative. Any delay in the licensing process, new or renewal, puts us in jeopardy with insurance companies and the ability of the board to review complaints on a timely basis.” The board’s current executive director, Elaine Hugunin, declined comment on “an ongoing lawsuit.”

The civil complaint names Gov. Jan Brewer and state treasurer Dean Martin as defendants. Former Gov. Janet Napolitano, who is now secretary of the U.S. Department of Homeland Security, signed the sweep-authorizing legislation. The suit claims that the legislation transferring monies from state regulatory agencies and boards to the state’s general fund is unconstitutional taxation under Arizona law “because it levied a tax without stating distinctly the object of the tax.

“As a result of the transfer, the state regulatory boards have less funding to carry out statutory responsibilities,” the suit says. “This transfer limits the ability of the respective boards to oversee and regulate the licenses of the members of the plaintiff associations.”

In addition to regulatory fee sweeps in 2008 to replenish the general fund, Gov. Brewer in January cut $1.6 billion in spending from the state’s $10 billion annual budget, and the cuts take effect before the June 30 end of the fiscal year.

The process for the 13-association lawsuit was not immediately clear. Christine Cassetta, speaking for the plaintiffs’ Phoenix law firm, Quarles & Brady LLP, said a state answer is expected within 30 days of the filing.

Plaintiffs include the Arizona Athletic Trainers Association, Arizona Association of Chiropractic, Arizona Dental Association, Arizona Medical Association, Arizona College of Emergency Physicians, Arizona Nurses’ Association, Arizona Occupational Therapy Association, Arizona Optometric Association, Arizona Osteopathic Association, Arizona Pharmacy Alliance, Arizona Physical Therapy Association, Arizona State Association of Physician Assistants and Arizona Veterinary Medical Association.