House votes to levy new tax on hospitals

After an extended, and sometimes heated, debate, the Georgia House has voted to enact a new 1.45 percent tax on hospital patient revenues, a move estimated to raise $169 million for Medicaid.

With the state’s hospitals on board, the House approved the move after first agreeing to exempt physician-owned surgical centers. That amendment lowered the revenue estimate by $6 million.

The vote on the overall bill was 141-23.

But the debate wasn’t as easy as the vote count. Rep. Mark Hatfield (R-Waycross) said he signed a pledge not to raise taxes and warned other lawmakers who also signed the pledge not to do so. Hatfield then took the unusual step of naming the names of many lawmakers who had signed the pledge. His doing so brought a gasp and a few boos from the House, where it’s generally considered a no-no to name names.

“There’s only one label you can apply to this rag of a bill,” Hatfield said. “And that is a tax increase.”

But, ultimately, the bill passed as lawmakers realized hospitals had chosen this method over less appetizing options like the loss of sales tax exemptions for non-profit hospitals and deep cuts to Medicaid provider payments.

Together with the early vote by the House to increase a series of state fees, the state is about $260 million closer to filling its budget deficit for 2011 and likely avoided a forced break in the legislative session.

“Are we going to vote on policy here or are we going to use it for politics in campaigns?” House Majority Leader Jerry Keen (R-St. Simon’s Island). “Your hospitals have asked you to allow them to do this.”