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April 29. 2014 11:00AM

Senate president says short-term fix needed for Medicaid tax

CONCORD – Senate President Chuck Morse says a short-term fix is needed to address a recent court ruling that the state’s tax on hospitals is unconstitutional.

Speaking Tuesday at a Senate Ways and Means Committee meeting, the Salem Republican said lawmakers need a long-term solution that potentially phases out the Medicaid Enhancement Tax assessed on hospitals’ net in-patient services.

The tax raises $185 million annually, with $72 million going into the state’s general fund.

The court ruled the tax, which was instituted in 1991 but changed in 2011 so the state retained more of the money, violated the federal and state constitution’s equal protection provision, because it did not apply to other entities that provide identical or nearly identical services.

The committee will meet again in a week after the hospitals, lawmakers, the governor’s office and state officials continue to negotiate.


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