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January 20, 2013

Letter: Hospital bed tax: punting the Band-Aid

Our state leadership has decided to forego tackling the troublesome hospital bed tax problem by punting it to a state agency. But our elected leaders, charged with managing our state budget, are shirking their primary responsibility by giving an appointed board taxing authority for the next five years. When the Department of Transportation funding issue comes up again will the DOT board be given taxing authority to pay the tab?

Our state leadership is saying that if the $240 million a year bed tax is not continued then up to 15 hospitals will close due to the resulting Medicaid funding gap. But since this supposed temporary tax was implemented two years ago, this same leadership has increased general fund spending by $2 billion. Why did they not consider the upcoming Medicaid squeeze and provide for it with some of those monies? This would have spread the obligation to all Georgians rather than continuing to unfairly burden small businesses that lack the negotiating clout of large businesses. Media reports may say that hospitals pay this tax, but they do not. Paying patients fund this tax either directly or through insurance premiums.   

Georgia’s recovery continues to lag the nation’s because of decisions like this which penalize small businesses, our primary job generators. It is instructive that Louisiana’s governor has proposed eliminating their state income tax to improve their economic performance ... and this in a state with an income tax already lower than ours and boasting an unemployment rate of 5.8 percent vs. 7.8 percent nationally. Meanwhile, Georgia’s November 2012 unemployment rate of 8.5 percent inched up to 8.6 percent in December 2012.

Now is the time for comprehensive tax reform, not political gimmicks. Georgians deserve better.

David Pennington

Mayor, city of Dalton

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