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Franchise tax on hospitals has harsh side-effects

October 6, 2010
By Terry Boose

Our nation is witnessing a trend of burgeoning spending and out-of-control government growth, and Ohio is no different. The state budget, as crafted and passed by the House Democrats, appropriated $10 billion more than we spent in the previous biennium - including more than $7 billion in one-time resources that will be depleted in fiscal year 2012.

This astronomical increase in spending is artificially propped up by federal bailout money and the state's rainy day fund, neither of which will still be available in the next budget. As a result, all Ohioans soon will contend with an $8 billion deficit in the upcoming budget, much of which may have been avoided if state spending condensed to fit the downturned economy.

Instead, the House Democrats increased spending by using tax increases to fluff up their budget and procrastinate the difficult financial decisions that should have been made.

One such tax increase is a $150 million hospital franchise tax on our hospitals' uncompensated care services, including Medicare and Medicaid. This additional burden on Ohio's health care sector - which also is one of the most prominent employers in the state - has forced many hospitals to lay off workers, reduce care services or delay expansion projects.

Amherst Hospital, Fisher-Titus Medical Center, Mercy Willard Hospital and Specialty Hospital of Lorain provide the 58th House District with some of the most stable, high-paying jobs in the state. We need to keep this industry strong as we try to create jobs and get our unemployed neighbors back to work.

However, raising taxes on some of the largest employers in Ohio already has caused numerous health care centers to make cutbacks in jobs and services. To reduce this damaging fee and remove uncompensated care services from the tax base, I jointly sponsored House Bill 497 to keep the hospitals in our community strong and competitive.

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Terry Boose is state representative to the 58th district, which includes the eastern portion of Seneca County.

At the same time, I worked to reduce the price tag of state government so lawmakers would not turn to the taxpayers for revenue boosters. We all could have benefited from a more efficient state government; while the taxpayers would enjoy more spendable income for their families, state services would be more effective and accessible for those who rely on them most.

Knowing this, my House Republican colleagues and I worked to reduce the government bloat and lessen or eliminate the temptation to raise taxes on our citizens by advocating for the passage of our 10 "Future of Ohio" government reform bills, which would streamline state spending, restore transparency and accountability, and trim down inefficiencies. These bills include House Bills 25 (to streamline Ohio's executive branch), 65 (to require performance audits of state agencies) and 240 (to make Ohio's Medicaid system more efficient). Also included in the package is House Bill 436, which I jointly sponsored to allow state agencies to use private contractors for certain projects, which would save the state and the taxpayers significant money.

Throughout this General Assembly, I have spoken out against policies that dug our economic hole even deeper. As a strong believer in accountable government, one of my main focuses has been identifying waste and inefficiency so we can improve Ohio's tax climate and make our state more attractive to businesses. As your voice in Columbus, I will continue to work to protect your tax dollars and safeguard the jobs within our community.

 
 

 

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