Monday, January 25, 2010

Ralston, Cagle on bed tax: We sure hope not

Shortly before they spoke to city officials in Atlanta Monday morning for a Georgia Municipal Association breakfast, I spoke to Speaker of the House David Ralston and Lt. Gov. Casey Cagle about Gov. Sonny Perdue's proposed 1.6 percent hospital tax.

Last week, DCH Director Rhonda Medows said she didn't see any other way to balance her Medicaid budget without it.

Speaker Ralston said he's asked House Appropriations Chairman Ben Harbin to "make cuts anticipating that that (tax) will not be in the budget."

He said the cuts will likely be throughout the budget, not simply within the medical portion of the budget where the tax would send revenue, but he wasn't specific. Their hands are tied in someways. When the state accepted federal stimulus funds, it agreed not to cut Medicaid funding.

He re-iterated a common refrain for Republicans looking to balance the budget without new taxes: "There's a lot of concern, and I share that concern ... that any kind of (new) tax in this environment is counter productive."

Lt. Gov. Cagle called the tax a "very controversial" proposal that the General Assembly was able to avoid when Perdue proposed it last year. He was hopeful that would be the case again, though he noted the state's budget situation this year may be even worse than it was last year.

"There are no guarantees, unfortunately," he said.

Update: I turned this news into a longer story for The Telegraph. It includes some analysis of the tax:
The $395 million in new state spending on health care would allow the state to draw down federal money to support Medicaid at a ratio of three federal dollars for every one in state. That means the full impact from the two fees would be closer to $1.4 billion.

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