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Hospital Tax is Putting Jobs and Ohio’s Economy at Risk

Stay out of the water
Photo by candescent.

Ohioans have long felt the effects of the downturn in our state’s economy. With unemployment in the double digits for the 14th consecutive month, the vitality of our communities is being challenged and the wellbeing of our families compromised. Even in the midst of all this fiscal strain, many lawmakers in Columbus still believe “taxing our way out” is the path to economic success.

A new $150 million hospital tax was added the state operating budget for FY 2010-2011 as a way to help balance a poorly organized budget championed by Governor Strickland and the House Majority Democrats. If you only listen to the “sound bite” and not the entire story, it might make sense. You tax the hospitals, take the revenue collected, send it to the federal government where it is matched 2.77-to-1, bring it back to Ohio, and fund Medicaid costs.

But here is the rest of the story that you might not have heard. Governor Strickland is taxing the cost of uncompensated care. Yes, that’s right—your hospital is being taxed on care they are NOT getting paid for. That’s like saying to a family that does volunteer work, “Thank you for your help, but the work you did has a value of $1,000 and although you didn’t get paid, we’re going to tax you on it as if you received a paycheck.”

Governor Strickland is also taxing Medicaid and Medicare reimbursements, which barely cover the cost of supplies in many cases. Additionally, he is taxing private citizens, those without coverage, employers, and employees with health insurance plans. So when your health insurance plan increases in cost, thank Governor Strickland for the new tax.

It is irresponsible public policy to burden one of the top employers in the state while in the same breath touting a focus on job creation. The tax-and-spenders have created a backward incentive system, penalizing the hospitals for top performance in the economy. They especially penalize urban hospitals that provide a large amount of uncompensated care to our community’s uninsured residents.

Ohio cannot afford to punish an economic sector that is so crucial to the wellbeing of our families and communities. This is why I have put my full support behind House Bill 497, legislation aiming to minimize this hospital franchise fee. This bill, co-sponsored by Representatives Terry Boose (R-Norwalk) and Troy Balderson (R-Zanesville), would subtract the cost of uncompensated care, as well as the costs of Medicare and Medicaid, from the tax base. Additionally, it would reduce the tax base from 1.61 to 1.5 percent.

I also continue to urge consideration of House Bill 240, which I introduced more than a year ago to address waste, fraud and abuse within Ohio’s Medicaid system—saving the taxpayers millions of dollars each year. This legislation would reduce the government bloat and eliminate the temptation to nickel-and-dime our constituents when they are least able to afford it.

If we make an effort to financially revitalize Ohio’s health care sector, we can also revitalize our state’s economy. However, we cannot succeed with the overtaxed hospital system that is slowly smothering much-needed jobs. Ohio has had a bad turn in the economy, but with fiscal discipline and common sense, my colleagues and I in the House Republican Caucus are making strides to restore Ohio’s bright economic future.

 

Photo by candescent.