Senators approved President Chuck Morse’s plan to reduce the Medicaid Enhancement Tax along party lines yesterday, sending the Senate and House into a committee of conference with two different approaches on how to reform the controversial tax on hospitals.
Morse stressed that while his plan sends the Senate into the conference with a clear stance, the final solution is likely to look different.
“The Senate should be sending the message that we’re reducing this tax, not growing it,” Morse said.
Lawmakers are scrambling to respond to two superior court rulings deeming the tax, which is levied on inpatient and outpatient hospital services, unconstitutional. This biennium’s budget is counting on $149 million in revenue from the tax, but hospitals have told the Department of Revenue Administration that, as of now, they don’t plan on paying what’s due in October.
Morse’s amendment seeks to decrease the tax by a quarter of one percent each year and sends more of the collected revenue back to the hospitals to cover Medicaid and uncompensated care payments. It reduces the amount of revenue going into the general fund from $73 million in fiscal year 2015 to $17 million in fiscal year 2016. It also stops taxing swing beds, rehabilitation hospitals and laboratory services.
Sen. Lou D’Allesandro, a Manchester Democrat, offered his own amendment which was slightly different from Morse’s. His amendment reduces the rate, but at a more gradual pace and it still increases the amount paid back to hospitals. But it does not eliminate swing beds, rehab hospitals or lab services, which leaves about $30 million more in the general fund than Morse’s amendment.
It also attempted to mitigate constitutional concerns by writing into the law language that clarified why the state believes it can tax some service providers and not others.
Morse’s amendment passed and D’Allesandro’s amendment was defeated on party lines.
Lawmakers from both chambers will now hash out a fix in a committee of conference, which must complete its work by May 30. The House’s amendment also aims to clarify why the tax is constitutional and proposes lowering the rate of the tax but broadening the base, in order to get around arguments of unfairness while keeping revenue stable.
D’Allesandro, Morse and Sen. Bob Odell, a New London Republican, will be the Senate members of the committee of conference. House Speaker Terie Norelli has not yet named the House members.
The unemployed will not receive an increase in their federal benefits, as senators removed language to do so from a House bill yesterday.
The vote to eliminate the increase in benefits was along party lines. The bill would have increased benefits by between $2 and $30 a week. Without that portion, senators passed the remaining bill, which creates a committee to study the state’s unemployment compensation trust fund and changes the definitions of full- and part-time work.
It will now go to the Senate, which will accept or reject the changed language or request a committee of conference.
D’Allesandro spoke forcefully about why he believed the body should support the increases.
“If we 24 senators can’t increase an unemployment check by $2, then brother, we’re in trouble,” he said. “Go to the grocery store, buy an apple, an apple costs a buck, a loaf of bread $2.99, a half a gallon of milk, $3.”
But Republicans argued the state’s unemployment trust fund, which the benefits come out of, took a major hit in the recession and hasn’t yet recovered. As long as the trust fund is below a certain threshold, employers have to keep paying a surcharge until it gets back to an acceptable amount, said Majority Leader Jeb Bradley, a Wolfeboro Republican. Increasing the benefits now would extend employers’ obligation to pay that surcharge, he said.
Sen. Andy Sanborn, a Bedford Republican, said taking from the fund and continuing to take the surcharge would put more strain on businesses.
“How do we make sure people have a job when we are crushing – crushing – the people that are responsible to create them?” he asked. “This is not the time to continue to keep our hands around the neck of the small-business community.”
The party-line rejection of increasing unemployment benefits comes a week after Republican senators rejected raising the minimum wage.
The Senate yesterday also voted to:
∎ Table a bill establishing burial as a favored option for electric transmission line projects. Opponents said this bill could increase costs for consumers and may persuade the Northern Pass project to look outside of New Hampshire.
∎ Approve a bill increasing criteria for the building of wind farms. It directs the committee that approves energy projects to evaluate several factors including environmental and visual impacts when looking at possible wind projects.
∎ Create a commission that will study housing discrimination against victims of domestic violence or people who receive federal housing subsidies. The House-passed version of the bill would have banned landlords from discriminating against both groups, but many landlords protested the bill, and senators said the issue needed further study to come to a resolution that landlords and victims’ advocates can agree on.
∎ Approve a limited driver’s license for first-time drunken drivers to go to work, medical treatment, school or other location approved by a New Hampshire judge. People applying for the special license would have to have an ignition interlock device installed on the vehicle and could drive only to specified locations, such as to work or to attend an alcohol or drug treatment program. The bill goes back to the House for review.
∎ Expand New Hampshire’s tax on gas and diesel to alternative motor fuels. The tax would apply to fuels such as compressed natural gas, liquefied natural gas and propane. It would not apply to electricity. The tax would be levied at the same rate as the tax on gas and diesel and take effect Jan. 1.
∎ Impose limits on when fuel dealers can contract with customers to buy fuel in advance. The vote came in response to disruptions in home heating oil deliveries this winter by one of New Hampshire’s largest fuel companies. The bill would prohibit dealers from advertising or soliciting earlier than May 1 for consumers to enter into contracts for the upcoming fuel season. Currently, the contracts can’t be offered before Jan. 1. The bill next goes to the House for review.
∎ Approve a measure to tighten rules for table games operated in the name of New Hampshire charities. The bill establishes new financial record-keeping and reporting requirements for charities and deeper background investigations by the attorney general. The bill clarifies the definition of so-called redemption slot machines and the Racing and Charitable Gaming Commission’s enforcement authority over them. Yesterday’s vote sent the bill to the House for review.
∎ Pass a bill to include household pets in orders protecting victims of domestic violence. The bill expands the orders to include pets in cases involving stalking and domestic violence. The bill would allow judges to grant custody of any domestic pets or farm animals to the victim and issue an order barring the abuser from harming or disposing of the animal. It now goes to the House for review.