Tax News
Posted on May 31, 2008
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| 5/31/2008 6:20:57 AM Daily Journal |
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BY BOBBY HARRISON
Daily Journal Jackson Bureau
JACKSON – The Mississippi House was unable to garner the three-fifths majority needed Friday to pass a Senate proposal to levy a tax on hospital patients. Neither was it able to pass legislation to increase the cigarette tax.
Still, with no solution to a Medicaid shortfall of $90 million in sight, the Legislature adjourned until 2 p.m. Tuesday in a special session that has cost about $250,000.
Gov. Haley Barbour said Friday that if the shortfall is not dealt with by July 1, he would begin making cuts in the Division of Medicaid and that the primary target of those cuts would be Mississippi’s about 110 hospitals.
A cut of $90 million in state funds would mean a total cut of $375 million since Mississippi gets about $3 for each $1 it puts in Medicaid, which provides health care for the elderly, disabled and poor pregnant women and children.
The governor and the Senate support a proposal to place a tax of $167.25 per day on each hospital patient. The plan was developed with the cooperation of the Mississippi Hospital Association, though its leaders have said repeatedly they would prefer a cigarette tax as the House proposed in regular session.
The hospital tax could result in an increase on private health care premiums or a reductions in jobs or services, according to the governor’s own Advisory Committee for Medicaid, which is made up of hospital administrators from throughout the state.
Lt. Gov. Phil Bryant said taxing the hospitals “made very good sense” and that he was told that the costs would not be passed on to individuals.
On Friday, the House, through an amendment offered by Becky Currie, R-Brookhaven, offered the Senate hospital tax plan to a bill before the chamber. It received only 45 votes while 65 members voted against it.
Then the House Democrats offered an amendment to the same bill to increase the cigarette tax by 50 cents to deal with the shortfall. That proposal passed, but the Democrats were three votes short of the three-fifths majority needed for the final passage of the bill.
With neither side able to able to muster the three-fifths majority needed to pass a tax bill, the leadership offered another option.
That option, which passed 70-41, would require the governor to take money out of the $378 million rainy day fund instead of making Medicaid cuts. Rep. Steve Holland, D-Plantersville, said the rainy day fund would not be needed since cuts would not be required until long after the Legislature was back in the 2009 regular session.
But Holland said it would be “a safety net.”
Barbour said, “The House proposal means next year we will have to come back and find a permanent source of funding for Medicaid. That simply does not make sense.”
Barbour said that if the bill reached his desk, he would veto it and continue with his plan to make cuts, though he did not want to.
He said the hospitals would bear the brunt of the cuts since the shortfall centers on money needed to match federal funds to pay hospitals for treating indigent patients and Medicaid patients.
Since the hospitals would benefit from the federal money, Barbour said, they should provide the state revenue to draw down those funds.
“As usual, the governor’s method of operation is it’s his way or the highway,” said House Speaker Billy McCoy, D-Rienzi. “The House has had an opportunity to vote on every proposal – including his proposal, which was defeated by a wide margin because it taxes sick people in beds….
“It’s time to let the Senate vote on all the options.”
Bryant said, like the governor, he disliked the House plan to use the rainy day fund as a safety net, but left open the slight possibility the Senate might consider the legislation.
Bobby Harrison is chief of the Daily Journal’s Capitol bureau. Contact him at
bobby.harrison@djournal.com, or call (601) 353-3119.
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