Governor Proposes Hospital Tax, Medicaid Cuts, Eliminating Sales Tax Exemption for Not-for-Profit Hospitals
Gwinnett Medical Center needs your immediate help!

LAWRENCEVILLE, GA (March 12, 2010) - Georgia hospitals face new taxes or funding cuts due to the state’s budget problems in this economic downturn. Governor Perdue has proposed a $247 million tax on hospitals, with GMC’s share at about $8.5 million dollars. His only alternative to this proposed tax would be a devastating payment rate cut to healthcare providers who serve the state’s Medicaid patients. Either a hospital tax or a rate cut would place a significant burden on Georgia’s health care system. We also just learned of another proposal to eliminate the sales tax exemption for not-for-profit hospitals in Georgia, costing them as much as $150 million. The cost to GMC is about $8.5 million dollars.

There’s a wonderful alternative to these bad policy proposals – a $1-per-pack increase in the state’s tobacco tax. House Bill (HB) 39, already introduced in the General Assembly, would do just that. This law would generate more than $350 million in state revenue … and prevent an unhealthy hospital tax or damaging cuts to Georgia’s Medicaid program.

At 37 cents per pack, Georgia has one of the lowest cigarette tax rates in the nation. (Our state ranks 47th in the nation.) The dollar-per-pack increase, which would bring the state’s tobacco tax up to the national average, is a win-win for Georgia. It would substantially reduce smoking in adults and children, and provide a new revenue source. Georgia voters support this proposal – in a recent survey, 73 percent supported a $1 fee on tobacco.

This bill faces opposition from the entrenched and powerful tobacco lobby. Some state elected officials also fear that any tax, no matter the voter support or its benefits, would not be politically good in an election year. It is unfortunate these people are placing politics above the well-being of our citizens and hospitals.

Here’s how you can help GMC. Contact your elected representative. Ask him or her to support a sensible alternative to the hospital tax or the Medicaid rate cut – namely HB 39, the $1-per-pack increase to the state’s tobacco tax. Visit www.gach.org and click on the “Take Action” button to send an email or a letter to your legislators asking for their support. It’s easy. It’s fast. And it can make a difference. 

If you have any questions or comments about this issue, please contact Thomas Shepherd (678-312-4300), Mark Mullin (678-312-4193), or Dolores Ware (678-312-4114). Or send me a note. Please act today.

Thank you for your prompt support when it matters for GMC and your fellow associates.

Sincerely,
Philip R. Wolfe
President & Chief Executive Officer