Can you imagine if state lawmakers wanted to tax private schools to balance the Texas public school budget? Texans would be outraged by such an absurd proposal. This outrageous scheme is precisely what some lawmakers want to do with nursing homes. They want to tax private pay nursing homes to pay for Medicaid nursing homes. The plan is in Texas Senate Bill 1130, historically known as the Granny Tax. It could tax Texas private pay nursing homes $120 million a year.
As organizations serving both Medicaid and private pay residents, we disagree that the state should tax one group of elderly to pay for the care of another. The legislation would cost an average private pay nursing home approximately $500,000 per year. SB 1130 is simply an unfair tax.
Supporters of the legislation suggest that it would not tax the elderly already paying for their own care, but would instead be the burden of the organization taking care of them — that those patients would not see a tax increase. But let’s be realistic. No business can absorb an average tax increase of $500,000 without passing it to consumers.
Whether SB 1130 falls on consumers or businesses, it is a tax that places a heavy financial weight on those paying for their own care.
This proposal is based on a similar plan that Missouri implemented more than 20 years ago. But Missouri quality ratings are nearly the same as Texas, raising a fundamental problem with this bill- that more money does not necessarily equate with better quality.
We must emphasize that SB 1130 does not track how the tax money is distributed. The tax would generate over $800 million, with no legislative oversight on how that money would be spent. A recent Texas Senate Health and Human Services Committee, chaired by Senator Charles Schwertner (R-Georgetown), brought this issue to light.
Instead of strengthening legislative accountability, the bill would pass the responsibility of making Medicaid payments to a private corporation controlled by the nursing home industry. We see that as a potential opening for Medicaid fraud.
The legislative authors argue that the tax is justified since it benefits the majority of Texas nursing home residents in Medicaid facilities. Private pay facilities, representing a smaller percentage of nursing homes, should accept the tax as part of a broader social obligation.
If you aren’t sure how you feel about that argument, then ask yourself this question about public and private schools. Should private schools have a duty to pay for the budget gap in Texas public schools?
We all know that taxing private pay residents and caregivers is an unfair way to balance the state Medicaid budget. Texas Medicaid is underfunded, but all Texans should carry that responsibility.
Contact Gov. Greg Abbott and ask him to fulfill his promise to the people of Texas, when he said in his
State of the State address that “the only good tax is a dead tax.” Gov. Abbott delivered this message precisely against legislative trickery like SB 1130. With your help, we trust that lawmakers will send this tax bill to the legislative graveyard.
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