“I opposed it in 2010, and I intend to oppose it again,” Hill said. “I believed it to be a tax increase, and I did my research and not all the hospitals were even in support of it.”
Lawmakers adopted the tax in 2010 as state tax collections tanked because of the recession. It uses tax money paid by the hospitals to generate an even larger pot of state and federal health care money, which then flows back to the hospitals.
Hill said he was ousted from his role as chairman of the Senate Reapportionment and Redistricting Committee in 2010 for failing to vote in favor of the bill.
“I got stripped of my chairmanship by the leadership,” Hill said.
The leadership he’s referring to is Lt. Gov. Casey Cagle, Majority Leader Chip Rogers and President Pro Tem Tommie Smith.
“Casey delivered the message, but it was a collective decision by those in leadership,” Hill said. “There were three of us. Mitch Seabaugh (R-Sharpsburg), Preston Smith (R-Rome), they all got punished as well.”
With the bed tax set to expire next summer, anti-tax personality Grover Norquist, president of Americans For Tax Reform, is calling on Republican lawmakers to oppose its renewal, arguing that it would violate the pledge some of them signed not to raise taxes.
Hill said hospitals such as Atlanta’s Grady that receive a large portion of their funding through Medicaid dollars tended to support the bed tax while those that didn’t, such as WellStar, were either neutral or did not support it.
“I call it federal crack dollars,” Hill said. “The federal government pimps us with federal dollars — and they’re doing it again with Obamacare — and then along the way they reduce the federal allocation after the state has chosen to participate in the program or expand their program based on receiving federal dollars, and politically it becomes even more challenging to ‘just say no.’
“This hospital bed tax is a perfect example. It was difficult enough to pass it the first time, and now there’s still a hole in the budget, and some hospitals are benefiting from those monies in the short term, I’d suggest, and it’s going to be harder to not take it.”
Hill believes it is the patients who suffer in the end.
“There’s less access to health care because fewer doctors are taking Medicaid patients because of lower reimbursements,” he said.
State Rep. Ed Setzler (R-Acworth) said he voted for the proposal in 2010 because it was part of a larger package of tax-saving measures.
“It levied a bed tax, if you will, a fee for health care that was going to fund people with uncompensated care, but it phased in bigger tax cuts in future years, so in essence it was revenue-positive for two years during the need to bridge, but it was a tax cut over time,” Setzler said.
Setzler said he opposes the continuation of the bed tax on its own.
“The only way I could be persuaded is if there was a tax package with a much bigger permanent tax cut and elimination of a cut to our marginal tax rates. Then I may be open to consider it,” Setzler said.
Like Setzler, state Rep. Don Parsons (R-east Cobb) said he voted in favor of the proposal in 2010 because it was part of a larger package.
“That was the thing, the catalyst, the straw that broke the camel’s back that kind of started the whole thing over in the Senate,” Parsons said. “I don’t remember all the details, but Casey, he supported it, and you had a significant part of the Senate Republican leadership who were opposed to it, and I think he felt like he was putting them on the spot. There had been things brewing over there between them and Casey for a while, but I think that was the thing that actually got the whole shooting match started where they grabbed a lot of the power away from him.”
As for renewing the tax, Parsons said he is inclined to do so.
“I know one of the winners on this thing was the Children’s Hospital, and my gosh, you got to think about things like that, so when it comes up again, I think it’s going to be different than what’s currently in place,” Parsons said. “I think there’s going to be changes to it, but my inclination is I’ll do the same thing I did last time, and that is to support it.”
State Rep. Rich Golick (R-Smyrna) said, “I’m going to take the next few months to study the issue again in the context of our current fiscal condition, and then arrive at a fact-based position — not one based on press-release hysterics from either side of the issue.”
After voting in favor of the legislation in 2010, Golick told the Journal that he supported it because the $170 million it generated would access more than $500 million in federal funds to help fill the state’s Medicare funding gap.
“If we leave that money on the table, we’d be forced to further cut vital services to citizens, including the elderly, mentally infirm and children on PeachCare. That’s morally unacceptable to me,” Golick said at the time. “Also, if we didn’t fill that gap, then Medicaid patients from hospitals like Grady would flood other metro hospitals who are unprepared for that overflow. I assume that’s why hospital systems such as WellStar personally lobbied me to support the measure.”
WellStar Health System spokeswoman Michelle Robinson said because of worsening budget conditions in 2010, WellStar and other hospitals were asked by elected officials to choose between three options to help balance the state budget.
“Options included disastrous cuts in Medicaid reimbursements, the restructuring of the not-for-profit community hospital business model or a Hospital Provider Tax, which has been successful in more than forty states across the U.S.,” Robinson said. “Passage of the Hospital Provider Tax, which will sunset on June 30, 2013, helped the state fill a huge hole in the state budget. WellStar Health System is not a financial beneficiary of the current tax program, but understands that a reauthorization of the program may be the best option to ensure a balanced budget that does not further jeopardize the health of Georgians.”
State Rep. Earl Ehrhart (R-Powder Springs) said he’s leaning in favor of Norquist’s position against renewal.
“I was there when we said this was temporary. Hard to go back on that now,” Ehrhart said.
State Rep. John Carson (R-northeast Cobb) was not in office when the bill was first approved, nor has he signed Norquist’s pledge.
“I did not sign the pledge, or any pledges, because I serve my constituents in northeast Cobb and southeast Cherokee, not Grover Norquist,” Carson said. “I am very much a fiscal conservative, but I work for and answer only to my constituents. Having said that, I am becoming familiar with the bed tax, which was more or less a temporary plug in the budget several years ago, and I am eager to look for ways to eliminate it. The problem with temporary taxes is they are not temporary. Governments very rarely give up a revenue stream.”
Like Ehrhart, State Rep. Sam Teasley (R-Marietta) said he’s leaning against renewal as well.
“My expectation is that I will oppose a renewal of this provision, but I am committed to hearing from both sides of the issue before making a final decision,” Teasley said.
State Representative-elect Charles Gregory (R-Kennesaw), who ousted Judy Manning in the Republican primary, said based on what he’s read, it’s likely he will oppose the renewal of the bed tax.
“It’s a tax increase,” Gregory said. “And the federal matching programs serve to keep Georgia dependent on the federal government and deprive us of state sovereignty. We send our money to Washington and if the state does what Uncle Sam wants, they might send us a little back — minus administrative costs of course. But this narrow focus on taxes is just another way to distract us from the real problem — spending. In the end, it’s completely about spending. Once the government spends, they are obligated to pay — either by taxing, borrowing, or printing the money. They have us busy arguing over what group pays a few percentage points more or less in taxes; meanwhile, we are all getting robbed blind through the inflation tax as they keep the printing presses rolling in high gear and continue to debase the dollar.”
State Rep. Matt Dollar (R-east Cobb), said while he signed Norquist’s no-tax-hike pledge back in 2002, he believes Norquist has changed the terms of the contract.
“At the time, I took it at face value to say, ‘hey, if you elect me, I’m not going to raise your taxes,’” Dollar said of Norquist’s pledge. “But I thought that I would be the ultimate decider on whether or not something constituted a tax increase, and what we’ve come to find is that we are not our own authority, someone else is. I hold my own personal pledge to my constituents that I’m not going to raise their taxes to a higher echelon or standard than some guy in D.C. telling me what I can and cannot do.”
Dollar said if none of Obamacare is repealed the state could face an estimated $77 million Medicaid hole in the budget this year.
“I don’t think you’re going to find anybody that could really commit one way to the other on something like this until we see what the budget looks like,” Dollar said. “It will be big, and big and big, and probably won’t be decided until Day 39 like everything else, that would be my guess. I think it’s shaping up to be quite a battle.”