Flaggs questions legality of Barbour’s tax proposal|[7/8/06]

Published 12:00 am Saturday, July 8, 2006

Joining other critics, Rep. George Flaggs, D-Vicksburg, is asking if it’s legal for the governor to tax Mississippi hospitals to make up for a shortfall in state Medicaid funding.

&#8220First off, I think it is unconstitutional for anyone other than the legislature to levy a tax,” Flaggs said Friday in a news release. &#8220The second point is I agree with U.S. Sen. Trent Lott when he said that if a duck walks and talks like a duck, it’s a duck, and the same goes for a tax. A tax by any other name like ‘assessment’ is still a tax.”

On June 8, Medicaid Executive Director Robert Robinson, a Gov. Haley Barbour appointee, sent a letter to hospitals across the state telling them an assessment of about 1.5 percent would be charged on gross revenues to make up for a $90 million deficit in Medicaid, a health-care program that covers about 750,000 poor Mississippians.

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The gap, Barbour has said, is due to the federal government stopping Mississippi and other states from using a complicated funding formula that had allowed the states to receive more federal money.

Under the formula, Mississippi gets about $3 in federal money for every $1 in state funding.

On Friday, Barbour announced a new plan that calls for hospitals to pay $45 million and the state to come up with the other half.

Instead, Flaggs said, he favors a 50-cent-per-pack increase in cigarette taxes to make up for the shortfall.

&#8220That way, the $70 million surplus we had at the end of the past fiscal year can be used for the underfunded State Department of Health, for public education and for other areas of state government that have been suffering,” he said. &#8220It also could be used to offset the continued rise in medical care for our state employees.”

Flaggs is a member of the House Joint Legislative Budget Committee and the House Public Health and Medicaid Committee.

&#8220Any increase in health care services is ultimately going to be borne by the patient,” Flaggs said. &#8220We all know that any extra charge the hospitals must pay will be passed on to their patients.”

Under Barbour’s proposal, the tax would take effect Sept. 1 instead of July 1, as originally planned.