Hospital Bed Tax Is No Cure For New Jersey’s Fiscal Woes
By Assemblyman Sean T. Kean

It is little surprise that in a state with some of the highest taxes in the nation, our government would resort to taxing the sick. While it may not be a surprise, it is an unacceptable policy.

Recent analysis conducted by the nonpartisan Office of Legislative Services shows that nearly twice as many hospitals in our state would lose money than would benefit under Governor Corzine’s proposed hospital bed tax. Additionally, hospital officials predict more than a handful of the state’s 82 acute care hospitals would be in danger of closing should the tax be approved.

Under the Governor’s plan, hospitals will be assessed a $1,424 per-bed, per-month tax on non-Medicare revenue. As a result of this tax, 49 New Jersey hospitals will pay an average of $2.38 million, with some of these health care facilities paying as much as $6 million annually. The “winners” in this scheme will be the 25 hospitals—most of which are located in the state’s urban areas--that receive an average of $4 million under the plan.

The tax is intended to raise $430 million, of which $215 million will be diverted to the general fund where it will help cover the proposed $2.8 billion state spending increase. The remaining money will be distributed to hospitals based on a funding formula that will direct most of the money to hospitals that serve high percentages of uninsured “charity care” patients.

If Governor Corzine is looking for a cure for the state’s charity care ills, this certainly is not the remedy. Our charity care system requires serious reform, not a band-aid fix. That, however, is not the motivation. Its real intent is to help close a projected budget deficit of nearly $4 billion – at the expense of our hospitals and residents.

I recently met with officials from Meridian Health System which operates Jersey Shore University Medical Center in Neptune. They, like all the state’s acute care facilities, vehemently oppose this tax as it will force hospitals to further cut staff and reduce health care offerings. The result will be deterioration in the quality of heath care for our residents who utilize these facilities as patients and the possible closure of several facilities.

It is interesting to note that while this proposal would primarily benefit inner city facilities, all hospitals stand united in their opposition to the tax. With waning insurance reimbursements and skyrocketing costs, all New Jersey hospitals are struggling to provide affordable health care.

This proposed tax is not part of some sound fiscal policy. Rather, it is another ill-conceived gimmick that will force the state’s already overburdened taxpayers to dig deeper into their pockets.

New Jersey residents are among the highest taxed residents in the nation. Each taxpaying resident is painfully aware that we also hold the distinction of paying the highest property taxes in the entire country. Now the state’s already overburdened taxpayers are going to have to pay to be sick. Talk about adding insult to injury.

For too long New Jerseyans have suffered under Trenton’s fiscal mismanagement and this hospital bed tax is the wrong prescription for the state’s dire financial condition.

[Assemblyman Kean maintains a legislative office at 1334 Laurel Avenue, Wall Township. His office may be contacted at (732) 974-0400.]