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‘Granny Tax’ Senate Hearing Reveals No Oversight Of Funds

Austin,Texas (PR MediaRelease) March 28, 2017

On Monday, the Texas Senate Health and Human Services Committee met to discuss Senate Bill 1130, a “granny tax” on nursing home residents and private business owners. The hearing revealed the tax would generate over $800 million, with no legislative oversight on how that money would be spent.

Chaired by Senator Charles Schwertner (R-Georgetown), the committee uncovered that in order for SB 1130 to meet federal guidelines, the legislature would have to give up oversight of the dollars. Instead of strengthening legislative accountability, the bill would pass the responsibility of making Medicaid payments to a private corporation controlled by special interests in the nursing home industry.

Officials with the Texas Health and Human Services Commission confirmed that the Texas Legislature could have no control over the distribution and allocation of those resources without violating federal law. George Linial, President and CEO of LeadingAge Texas, said “not only is this bad public policy, but I don’t think the legislature wants to give up oversight of such a large amount of Medicaid dollars.” LeadingAge Texas represents non-profit, faith-based retirement communities across Texas.

SB 1130 would generate revenue by placing a tax on nursing homes in Texas. That tax revenue would then be used to expand the amount of federal resources Texas can access. The state would direct those funds to a private corporation, with no legislative control. The independent entity, free from any government oversight, would determine how it spends the money, According to Linial, “state officials that testified today pointed out two critical things. First, this bill is a tax. Second, the state would have no connection to the private corporation distributing the $800 million.”

Carrying the weight of the bill are 30,000 Texans paying for their own nursing home care. Under the legislation, Texas seniors paying for their own care would carry the burden of a $4,000 annual tax.“Whether it is a consumer tax or a business tax – it is still a tax that creates undo burden,” added Linial.

Retirement communities from across the state testified in opposition to the bill because of the unfair burden it would place on private pay residents.  Most of these facilities serve retired veterans, teachers, farmers, and business-owners, paying for their own healthcare.  These organizations are asking that Governor Greg Abbott, Lieutenant Governor Dan Patrick, and Chairman Charles Schwertner put an immediate end to this legislation.

LeadingAge Texas is a trade association representing the full continuum of mission-driven, not-for-profit aging services providers in Texas.

George Linial
LeadingAge Texas


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