and the
Citizens Economic Research Foundation

Wednesday, May 24, 2006

FY ‘07 Budget Debate:  Nursing Home Tax Repeal

To:  Members of the Massachusetts Senate
         May 24, 2006
Re:  FY ‘07 Budget Debate: Nursing Home Tax Repeal
        Amendment # 16 (Senators Brown, Timilty and Tucker);
        Amendment # 750 (Senators Lees, Knapik, Brown, Hedlund, Tisei and Tarr)

Here is one you might be able to enthusiastically support.

The Legislature recently passed a health care reform bill that was meant to get more health care coverage and take some pressure off Medicaid expenditures.  Within this context, you might want to stop  punishing people who take responsibility for their own nursing home care, and are not on Medicaid.

Presently, self-payers in nursing homes must pay a tax of $10.99 a day for the “privilege” of not being on Medicaid.  People who do not cheat, do not hide or get rid of their assets, are penalized by being forced to pay over $4,000 a year to take care of Medicaid patients.

It is fine for society as a whole to take care of the sick and elderly.  It is wrong to tax the sick and elderly, many of them Alzheimer’s patients, to pay more than their share of the total society burden. This tax soon forces them onto the Medicaid system, which they had planned to avoid for as long as possible.

We have found that many legislators are not aware of this tax, which passed as part of the complex “fiscal crisis tax increase” bill of 2002.  Focus was on the income tax at the time.

Legislators promised that the income tax rollback would continue when the fiscal crisis was over, and we still urge this compliance with the will of the voters.  For this reason, even former Sen. President Tom Birmingham, former Senator Warren Tolman, and former pro-tax activist Jim Braude have publicly said the tax should be returned to 5% now.

The nursing home tax should be repealed on the grounds of fairness to the most vulnerable taxpayers: the old, the sick, and the honest.  We hope you will vote for this amendment.  A version of it, filed by Sen. Fargo, has been reported favorably from the Health Care Committee.  Thank you for your attention.

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