Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 9, 1992 TAG: 9201090574
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: THOMAS BOYER STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
PROPOSAL TO TAX VA. HOSPITALS UNVEILED
Gov. Douglas Wilder on Wednesday picked a $68 million fight with some of the state's most potent lobbying forces, proposing new taxes on hospitals, nursing homes and druggists to help pay the exploding cost of medical care for poor and elderly Virginians.The levies are part of a $28 billion recession-era budget that would eliminate a half-dozen popular programs, lay off 900 state employees and permit sharp tuition increases at state colleges and universities.
The hospital tax got a frosty reception from lawmakers, who saw in it a dilemma: face the wrath of hospitals, or find $68 million through other taxes or budget cuts.
"You put a shotgun at our heads," Senate Finance Committee Chairman Hunter Andrews, D-Hampton, thundered at a Wilder aide during a briefing Wednesday. "You're saying, `Unless you pass this bill, you've got to solve the problem another way.' "
The tax plan would take 0.8 percent of hospitals' total receipts, exempting their Medicare, Medicaid and charity caseloads. For nursing homes, the levy would be 1 percent; for pharmacists, 0.5 percent. Doctors, regardless of the size of their practices, would be required to ante up $200 per year.
Wilder administration officials portrayed their plans as a minor tax on a highly profitable industry, a way to control costs of a Medicaid program that has grown threefold in the last decade, to $1.4 billion a year. Medicaid is a federally mandated program that provides health coverage for the poor, elderly and disabled.
The tax "merely asks Virginia's health-care providers, whose profits over the next two years will surpass three-quarters of a billion dollars, to reduce their future expenditures by one-half of 1 percent," Wilder said in his televised speech.
But hospital groups argued that it amounted to a tax on the sick, because health-care providers would simply pass it on in higher charges. "The hospital is in effect the tax collector, and it's the patient who's covered by private insurance or who pays out of pocket who pays it," said Bruce J. Rueben, senior vice president of the Virginia Hospital Association. "It's a consumer tax, but it affects a very narrow base."
Initial lobbying was so intense that many lawmakers heard from angry health-care providers Wednesday even before the budget details were made public.
"I got four or five phone calls this morning from the pharmacists. I don't know how these things get out," said Del. Paul Councill Jr., D-Southampton, who sits on the House Appropriations Committee.
Also coming in for criticism Wednesday were several planned cuts in state programs. Homeowners who call their local extension agent for advice on lawn fertilizer might find the phone's been disconnected - or have to pay for the advice. Wilder's plans would eliminate the jobs of 120 Virginia Tech extension agents.
Wilder also swung a budget ax at the Center for Innovative Technology, a creation of former Gov. Charles Robb, now a U.S. senator and a longtime Wilder antagonist. Wilder proposed a 20 percent reduction in support in 1992-93, with slated elimination the following year for the agency, which works to develop high-tech industry in Virginia.
The state will also, if Wilder gets his way, end safety inspections of coal mines, surrendering responsibility for mine safety to the federal government. The state also will cut back on meat and poultry inspections - a move that legislators said could put small meatpackers out of business.
"It's going to cost jobs, a lot of jobs," said Del. Harry Purkey, R-Virginia Beach. "That's a dumb thing." Administration officials said the federal government would handle the inspections instead.
Keywords:
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