JACKSON — A new hospital tax agreement should help legislators reach a deal quickly on Mississippi’s nearly $5 billion budget for the fiscal year that begins in less than two weeks, House Speaker Billy McCoy said Sunday.
McCoy said an agreement in principle reached over the weekend was a huge step in negotiations between the House and the Senate. The two chambers are trying to craft a spending plan for state agencies and programs for fiscal year 2010.
The agreement calls for a $60 million hospital tax that could increase to $90 million once the state stops receiving federal stimulus money in 2010. In return, the hospitals could save nearly $100 million by reversing previous budget cuts and prohibiting future ones, said Sen. Hob Bryan, D-Amory, one of the negotiators.
Bryan said he and House Medicaid Chairman Dirk Dedeaux, D-Perkinston, signed the agreement.
Lawmakers have said the tax is needed to help cover the cost of Medicaid.
“It’s a huge step,” McCoy said during a telephone interview on Sunday. “We think it’s a reasonable compromise.”
McCoy said “there’s just no reason not to” reach a deal before the new budget year starts July 1.
Gov. Haley Barbour must convene legislators for a special session to pass budget bills and he has said he wouldn’t do it until the two chambers agreed. However, the governor has said Medicaid services will have to be cut if lawmakers pass an amount less than his proposed $90 million tax.
Barbour spokesman Dan Turner declined to comment on the proposed tax.
Medicaid is a health insurance program paid for with state and federal dollars. It provides coverage for the state’s needy, aged, blind and disabled and for low-income families with children. About one-quarter of the state’s residents are enrolled in the program.
Mississippi hospitals were taxed to help pay for Medicaid for about a dozen years. In 2005, the federal government blocked Mississippi from using the tax as it was then structured.
Barbour has said that in the past four years, Medicaid has an annual budget hole of $90 million.
Hospital executives had been fighting against the tax, but Mississippi Hospital Association President Sam Cameron said the latest proposal “is something that we can live with.”
“If the hospitals are going to pay these taxes, the hospitals need assurances that the governor is not going to come in and make cuts in the form of reduced reimbursements and a reduction in coverage,” Cameron said.
Paying the tax will impact rural hospitals more severely than some other facilities. He said the association was exploring ways to ease the burden on the smaller facilities.
Senate Appropriations Chairman Alan Nunnelee, R-Tupelo, said he hadn’t reviewed the hospital tax agreement.
“We’ve still got some details to iron out, but we’re closer than we’ve ever been,” Nunnelee said.
Shelia Byrd/The Associated Press