Manatee County Administrator Ed Hunzeker has once again introduced another new tax, this time a half-cent sales tax to pay for indigent healthcare services. This tax comes in addition to the new stormwater, EMS and franchise taxes that are all being pushed on Manatee County residents. The county says that a referendum could be scheduled as early as June, right about the time that many residents are engaged in summer travel.
The timing is a shift in respecting our citizens' desire to have major issues decided from fall to spring, when most of our citizens are here and can be involved in critical discussions. The rushed process seems haphazard, and the supposed logic is muddled by contradicting statements: the new taxes are revenue neutral, but that we need the new revenues to offset state reductions in tax revenue.
The new indigent health care sales tax Hunzeker proposes is unnecessary for several reasons. First, it is double taxation. The Patient Protection and Affordable Care Act, or Obamacare, is the current law of the land and with it comes at least five new taxes, in part to expand coverage of indigents through Medicaid.
Medical device manufacturers will be required to pay an additional 2.3 percent tax on gross sales (we have a number of these in our county). Every person who uses a Flexible Spending Account (FSA) will be affected by a new government cap of $2,500. Investment income has a new 3.8 percent tax for those whose AGI is over $200,000 or $250,000 for couples filing jointly (the tax is on the lesser of investment income or income over the cap); the threshold of costs before someone can deduct medical expenses also increases from 7.5 to 10 percent, and then there is the 0.9 percent Medicare payroll tax that begins being deducted once an employee's wages goes over $200,000, and is then deducted for the rest of that year. Forbes magazine estimates that these new taxes will bring in a quarter of a trillion dollars.
It should be noted that there is no legal requirement for the county to fund indigent care. We did it years ago because counties like ours had to create a healthcare system when none existed. Manatee County created and owned Manatee Memorial Hospital, which was the only hospital in our area. The county sold the hospital in the 80's and the money was held in what was called the corpus. An agreement was created to help fund indigent care, in which most of the interest from the corpus would be paid to Manatee Hospital. This worked well until Hunzeker recommended substantial increases that would start using the principal and interest of the corpus, draining $50 million in a few short years. Now we have a fiscal cliff for paying for indigent care since Hunzeker was able to get the majority of the Manatee County Commission to approve a fiscally irresponsible plan.
Certainly indigents should have access to health care – and they do. The question is, who should pay the bill? With all the new taxes that come with Obamacare, and considering the fact that our state and federal government have a system to provide healthcare for the most needy, maybe it's time to place the responsibility where it belongs: in the hands of our state and federal government who direct the spending of the tax dollars they've already collected from us.
As we have seen in the past, there is never enough money at the local level to fund indigent health care, which is one of the primary reasons programs like Medicaid exist. Were that not the case, the interest from the sale of the hospital would have resolved this issue. Hospitals and doctors should be able to expect to be paid for these services, but the solution for a workable compensation model to benefit those who cannot afford care is not something that can be managed at the lowest level of government.
None of this even considers the cost of having a referendum election in June, which could reach a quarter of a million dollars. Is this a responsible use of taxpayer money at a time when services are being reduced and most county employees have gone more than five years without a raise? The status of the corpus has been known for some time. Why wasn't this referendum included in the November election, when adding one item to an existing ballot would not have come at such great financial cost? Perhaps they feared that strong turnout and local disdain for the new healthcare law would have caused voters to scoff at another new tax which actually broadens what is already the most expansive government healthcare intervention in American history?
Obamacare is supposed to make insurance available to an additional 32 million Americans – for a total of 95 percent of the legal population. The expansion of Medicaid in order to cover more Americans unable to afford care is a cornerstone of that law. Another new tax to create a socialized medical program on the local level, before such broad federal and state changes are even implemented, will leave Manatee County taxpayers on the hook for continually funding the sort of programs in which expenses grow at a far greater pace than revenues. Everyone is in favor of affordable healthcare access, but before we start down the road of funding ambitious local expansions through new taxes, let's give the new federal plan that we're already paying for a chance to work.
Taxpayers Could be on the Hook for New Stormwater, EMS and Franchise Tax
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