Nonprofit Newswire | Sick Tax Proposed in Georgia

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March 15, 2010; Florida Times-Union | The part of this story that interests us at NPQ is the blame-game that is increasingly evident as state legislatures and governors try to figure out how to put together their FY2011 budgets.

In Georgia, the governor Sonny Perdue slugged it out with the state university system and then apparently turned his budget ire toward hospitals. He has long been on record advocating a 1.6 percent tax on hospital revenues, which would obviously hit both nonprofit and for-profit hospitals, a burden that he thought would be made up by increased Medicaid-matching funds from the federal government.

Hospitals weren’t quite on the same wavelength with Perdue. They suggested that he should raise the taxes on cigarettes rather than on sick patients. The governor wasn’t happy, suggesting that if the hospitals didn’t go along with his “sick tax”, they’d suffer a 10.25 percent cut in their Medicaid reimbursements.

Now he has increased the threats by proposing to eliminate nonprofit hospitals’ exemptions from sales taxes on the purchase of hospital supplies, which he estimates will bring in $130 million.

We suspect that Sonny Perdue is not the only occupant of a governor’s mansion imagining how a sick tax might make their state budget healthier.—Rick Cohen