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Governor’s plan threatens Georgia hospitals

In a threatening move toward Georgia’s financially struggling hospitals, Gov. Sonny Perdue announced March 11 his plan to cut Medicaid reimbursement rates by 10.25 percent and eliminate a sales tax exemption for non-profit hospitals. These actions will cost hospitals a total of $274 million during fiscal year 2011.
It is unfortunate that the governor would consider a proposal so damaging to our health care system without first supporting a concept that would bring in hundreds of millions of dollars in additional revenue – without raising taxes. A number of Georgia cities participated in a pilot program for the local collection of sales taxes and showed the state was failing to collect sales tax revenue that consumers were paying but was going unreported.
The state is losing up to $1 billion per year because the Department of Revenue in this administration has been unsuccessful in cracking down on sales tax cheating. Legislation that would authorize local governments to collect sales taxes and help make up for these losses has been stuck in committee since last year because of partisanship by the legislative majority.
The governor’s new plan to slash Medicaid reimbursements and charge a sales tax on non-profit hospitals is apparently an angry response to the health care community’s strong opposition to his previous proposal to impose a 1.6 percent tax increase on all hospitals. This proposal will likely draw similar opposition because of the devastating effect it would have on health care facilities across the state, including many rural hospitals already on the verge of financial collapse.
Also on March 11, the governor announced he is shifting $342 million in federal stimulus funding from the FY 2011 budget to the current year’s budget, in the wake of February’s revenue report that showed a 9.9 percent decline from the previous year. Georgia’s tax collections have now fallen for 15 consecutive months.
Higher Education Cuts: Another controversial budget proposal is a recommendation to slash an additional $300 million from Georgia’s public colleges and universities. Having already cut $380 million from the University System budget since 2008, further deep reductions would be painful for college students, faculty and staff and the state’s economy. Augusta State University, the Medical College of Georgia and East Georgia College would be severely affected by these cuts. MCG would lose $25.6 million in funding and 63 staff positions; Augusta State would lose $4.7 million and 24 positions; East Georgia College would lose $1 million and 10 positions.
Property Tax Reform: There was some good news for taxpayers in the Senate last week. SB 346, a property tax reform measure that would assure that all property owners receive an annual tax assessment notice, was approved unanimously March 11. Taxpayers would also receive information on when to file an appeal and have 45 days to do so. SB 346 now goes to the House of Representatives for its consideration.
Water Conservation: Legislation calling for increased water conservation measures cleared the Senate unanimously March 10. SB 370 would establish new rules for public water systems, stronger efforts to plug leaks and new standards to require high-efficiency plumbing fixtures. The measure is intended to help Georgia resolve its water dispute with Florida and Alabama, in response to a federal judge’s ruling that threatens the cutoff of water withdrawals for metro Atlanta from Lake Lanier. However, the proposal does not address the controversial issue of inter-basin transfers, which threatens the water supply in communities up and down the Savannah River. The House passed similar legislation the same day.
Paperwork Reduction: On March 11, the Senate voted unanimously in favor of legislation that mandates the electronic distribution and publication of state government reports, unless printing is legally required. The sponsor of SB 388 said this measure helps create a culture of efficiency and cost savings within state government, which is necessitated by the economic recession. The bill is now under consideration in the House.
Fee Assessments: The Senate voted March 8 to approve legislation that would assess the current level of fees charged by state agencies and commissions and determine which ones should be adjusted. SB 381, which now goes to the House for its consideration, would require the governor’s Office of Planning and Budget to prepare a comprehensive report on the fees that are assessed and collected by the state, along with the amount of revenues raised by each fee. Some of the fees charged for state services have not been raised or lowered since 1955.
First Aid Training: On March 8, the Senate passed SB 298, which would make first aid a standard part of secondary health education, alongside health, drug prevention and sex education. The measure is aimed at creating a generation of Georgians with basic first aid skills. The House will now consider the proposal.
 
Sen. J.B. Powell (D-Blythe) represents the 23rd District (Burke, Emanuel, Jefferson, Jenkins, Richmond, Screven, Washington and Wilkinson counties) in the Georgia State Senate. During the legislative session, contact him at 320-A Coverdell Office Building, Atlanta, Ga., 30334; by phone at 404-463-1314 or by e-mail at jb.powell@senate.ga.gov.