CONCORD (AP) — Lawmakers need to agree soon on a short-term fix to a recent court ruling that found New Hampshire’s tax on hospitals unconstitutional to avoid a major impact on the state budget, Senate President Chuck Morse said yesterday.
The state plans to appeal the ruling, but Morse, a Salem Republican, told the Senate Ways and Means Committee that a short-term fix is needed before the Legislature adjourns next month, followed by a long-term effort to phase out the tax.
He said that could begin by reducing the 5.5 percent tax on net patient revenues. He said how much the tax is reduced and how quickly depends on how phasing out the tax would affect payments to medical providers and aid for hospitals providing uncompensated care.
The governor, legislative leaders and representatives from the hospitals have been meeting to try to find a way to address the issues that prompted the hospitals to sue the state. The Senate committee will discuss the issue again next week.
“While the governor looks forward to more details about Senate President Morse’s ideas, she continues to work with hospitals, providers, legislators and state officials in order to address the fiscal and legal challenges posed by the MET ruling as quickly possible,” said William Hinkle, Hassan’s press secretary. “The governor continues to believe that by working with all stakeholders, we can resolve these challenges in a responsible way that is fair to all parties and that protects the state’s budget and the health of Granite Staters.”
The tax produces about $185 million annually for Medicaid and other state spending. The state kept $72 million this year for general state spending, used $82 million for payments to health care providers and returned $31 million to the hospitals in aid to help offset the cost of uncompensated care.