Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 22, 1992 TAG: 9201220347
SECTION: VIRGINIA PAGE: B3 EDITION: STATE
SOURCE: THOMAS BOYER STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
WILDER DROPS PROPOSAL TO TAX DRUG RECEIPTS
Gov. Douglas Wilder offered the first compromise Tuesday in his battle with the health-care industry, withdrawing a plan to tax pharmacists' receipts to generate $8 million to supplement state payments for medical care for the poor.Wilder announced the shift as he formally unveiled his tax program, shaved now to $60 million, and disclosed a new effort to ensure that the hospitals and nursing homes which would pay most of that money don't pass the cost to patients.
Wilder said he gave up on a 0.5 percent tax on pharmacists' receipts because drug prices are largely set by national drug companies.
Opponents had said the pharmacy tax would have driven many independent druggists out of business. "We do not want to harm Virginia pharmacies caught in a price squeeze beyond their control," Wilder said.
Wilder's hospital tax proposal, sponsored by Sen. Stanley Walker, D-Norfolk, and Del. Lewis Parker, D-South Hill, would require hospitals to pay 0.8 percent of their gross receipts, minus any charges for charity or Medicaid patients. The governor wants a 1 percent levy on nursing home charges and a $200 annual charge on every state doctor.
Howard Cullum, state secretary of health and human resources, said the administration legislation also would require hospitals, as part of their tax returns, to list cost-cutting measures that add up to the amount of the tax.
Other parts of the Wilder package would:
Expand the powers of the Virginia Health Services Cost Review Council, and change the way it calculates hospital expenses.
Re-regulate hospital and doctor purchases of big-ticket medical equipment, such as magnetic resonance imaging (MRI) scanners.
Ask the legislature to study tax exemptions given to non-profit hospitals, some of which have shown multimillion-dollar profits.
Require hospitals to make public executive salaries and other financial information.
Wilder said he will try to convince voters the package is a tax on hospitals, but not them. "This is an instance of not raising general taxes by having a provider community that can afford to reduce their operating expenditures," he said. "This stops us from raising taxes."
That brought a chortle from Republican party caucus director Steve Haner, who listened to Wilder's news conference. "It's a tax increase that will lower your taxes. I can't wait to see the law that suspends the laws of economics."
Both Walker and Parker, senior members of the tax-writing committees in their respective houses, acknowledged the plan has a long way to go.
"It's tough right now," Parker said. "There might be a heck of a change - you see things change here overnight. Once people understand you've got to do something . . . I mean, what the heck do you want to do, raise taxes? You've got to do something."
"I don't know if it's got the support," said Walker, who heads a commission studying health care in Virginia. "But I and the commission understand that it's something that's got to be addressed, that should be on the table."
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GENERAL ASSEMBLY
Memo: shorter version ran in the Metro edition.