Hospital tax talks stall

May 23, 2009



JACKSON - Legislative negotiations worsened Friday as lawmakers gave up reaching a House-Senate compromise on a hospital tax and now head into a budget conflict that will be hard to reconcile. 


Without the tax, the Republican-controlled Senate is insisting state government take painful budget cuts the Democratic-dominated House will not approve. 


"I think the public should be getting worried. Without the hospital tax, I don''t think we''re going to get a budget right now," said Rep. Jeff Smith, D-Columbus. "I think the public needs to put pressure on the Legislature." 


Overcoming their differences on the hospital tax to help fund Medicaid had been considered the key to the House and Senate passing a state budget to keep government operating past June. 


House-Senate budget negotiators said Friday they could not agree on how much the Medicaid tax should be. They then turned their attention to fighting over state government''s overall $19 billion budget. 


Now the legislative clash is largely over how much of the state''s reserve funds and federal stimulus money should be spent. 


The impasse comes as the Legislature returns Tuesday from a two-week recess with hopes to adopt the state budget. 


Legislators are now two months behind the original date for deciding how much money state government will have in the fiscal year that starts July 1. 


Senate leaders allied with Republican Gov. Haley Barbour want to hold off spending $60 million so it can be saved for future needs. They say the economy could fall deeper into recession causing the state to be severely low on money. 


"The issue is are we willing to make difficult choices today in order to avoid some impossible dilemmas in 2011?" said Senate Appropriations Chairman Alan Nunnelee, R-Tupelo. 


He said the Senate is bracing for huge spending mandates for Medicaid in two years. 


"We can either smile and pretend like that increase does not exist or be prudent and plan for it," Nunnelee said. 


However, House Democrats say the Republicans are being too fiscally tight in pushing for rash budget cuts that could cause hundreds of state government employees to be laid off. 


"We in the House don''t think it''s necessary to attempt to balance future budgets when our need is now - the present. The anxiety is unfair to our dedicated state employees and the people they serve," said House Speaker Billy McCoy, D-Rienzi. 


The Senate should not be calling for budget cuts this coming year when the state has nearly $1 billion in various reserve funds, said House Appropriations Chairman Johnny Stringer, D-Montrose. 


"We have all these reserve funds to get through the bad times," Stringer said. 


This doesn''t include more than $400 million state government is getting in federal stimulus funds in the next budget year. More money comes in 2010 and possibly the next. 


"We don''t know what 2011 is going to be," Stringer said. 


"If we''re going to have to lay off people, let''s wait until next year. ... At least they''ll have time to be looking for another job." 


Barbour has been pushing for the $90 million-a-year tax on hospitals to help pay for Medicaid, the $4 billion government health-care program that serves about 560,000 poor people in Mississippi. 


House-Senate negotiators last week had tentatively agreed to a $60 million tax, but Nunnelee rejected House leaders'' call for the tax to be tied to a commitment that hospitals'' Medicaid reimbursements not be cut. 


The Mississippi Hospital Association has resisted the tax but would accept a $45 million levy with that no-cut condition. 


Barbour said the hospital tax is "a critical part of balancing the state budget and providing a fair, permanent, sustainable funding source for Medicaid." 


"Without it, the hospital association and its legislative allies, mostly in the House, are about to create a Medicaid funding shortfall, deep provider cuts or cuts to other state agencies of epic proportions."