ATLANTA — Gov. Nathan Deal has settled on a proposal that could allow lawmakers to avoid voting directly to extend a high-profile hospital tax that helps provide a significant part of state health-care spending.
Republican leaders lauded the idea Monday, the opening day of the General Assembly’s annual session.
At issue is the “bed tax,” which is an assessment on Georgia hospitals’ net patient revenue. The yield – more than $230 million this year – is used as state matching money to secure $400 million-plus of federal support for the Medicaid insurance program for low-income Georgians.
The money is paid back to hospitals via a higher payment rate for treating Medicaid patients. The assessment, which was originally adopted in 2010, expires in June and, with no replacement, would blow a hole in the state budget.
Health care providers have warned that losing the money would mean hospital closures and a reduction of health-care access. Anti-government advocates, led by national GOP power broker Grover Norquist, have urged lawmakers not to extend a deal, which they characterize as a tax increase.
To sidestep that choice, the Deal administration on Monday unveiled legislation that would allow a state board that sets health-care policy to establish assessments on hospital revenues, rather than have the Legislature do it directly. Spokesman Brian Robinson said the governor’s floor leaders would carry the legislation in both chambers.
Georgia Hospital Association spokesman Kevin Bloye praised Deal’s outline.
The initial draft gives the Board of Community Health the virtual taxing authority through June 30, 2018, or five state budget cycles.
House Speaker David Ralston, R-Blue Ridge, called the plan “a fair proposal.” He said a similar scenario has been in place for years in the nursing home industry.
Majority Leader Larry O’Neal, R-Bonaire, conceded that challengers in 2014 legislative races still could accuse lawmakers of “voting for a tax” even if it’s the state health board establishing the details.
“Probably so,” he said. “But we’re beyond elections and it’s time to deal with the policy that’s right for Georgia.”
Rep. Stacey Abrams, the House Democratic leader, was more skeptical, calling it “a novel approach.” She said she wants to explore questions about whether the model would effectively shift taxing authority – which constitutionally rest with the Assembly – to the executive branch. The board is made up of nine appointees from the governor.
Senate Appropriations Chairman Jack Hill, R-Reidsville, said, “I think some people will think that’s ceding authority.” But Hill said he had no problem with the proposal and noted that the board has a track record of independently setting policy, regardless of whether legislators approve.
The Hospital Association, Bloye said, has little interest in debating constitutional theory, though he made the organization’s argument nonetheless.
“We’ve always said this is not a tax,” he said. “It’s a provider fee that we willingly pay. From our perspective, this is the best alternative out there to continue to provide Medicaid services for the Georgians who need them.”