Hospital tax extensions leave state revenues $50m short
CONCORD - State revenues for November are almost $49 million short, largely because some hospitals did not pay the Medicaid Enhancement Tax on time.
Hospitals are expected to pay their Medicaid Enhancement Tax liability in November, but several were given extensions, according to Administrative Services Commissioner Linda Hodgdon.
Because tax information is confidential, she said it is impossible to tell how much additional revenue the state can expect from hospitals in the future.
The tax is assessed on patient services.
Last year, hospitals balked at paying the tax after lawmakers cut state funding for a program to help the state's largest hospitals make up for services they provided to the state's poorest residents.
Hodgdon called the $48 million shortfall in the Medicaid Enhancement Tax concerning.
The state revenue plan calls for $195.2 million to be collected in November, but the state only realized $146.3 million.
For the year to date, the state has collected $661 million in revenue while budget writers expected $703.8 million, for a $42.8 million shortfall. Last year at this time, the state collected $631.3 million.
Business taxes were also below estimates for November. Budget writers projected $9.3 million in revenue, but only $7.5 million was returned. Hodgdon said additional auditors would help recoup some of the shortfall. Last budget cycle, 19 auditor positions were eliminated in the Department of Revenue Administration.
She projected the layoff lowered business taxes by about $20 million a year.The communications tax was also below estimates by $2.1 million, returning $4.7 million for the month. Earlier this year, lawmakers eliminated taxes on Internet access, which was projected to cost the state about $6 million a year.
Hodgdon noted for the first five months of the 2013 fiscal year, the communications tax is about $5 million below estimates.
The revenue shortfalls were offset by better-than-expected returns for the rooms and meals, insurance, real estate transfer and interest and dividends taxes. The tobacco tax, which was lowered 10 cents a pack in the last budget, is down about $5 million for the year.
Hodgdon noted the decrease continues the same trend as last year when the tobacco tax was short about $1 million a month. The tax will automatically go back up beginning in August 2013 if the trend continues.