Bed-tax pursuit continues despite federal overtures

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Even though the Bush administration has stated its intention to curtail states' artificial pumping of revenues to create more federal matching funding, some states are plowing ahead with nursing home "bed tax" increases.

An Alabama Senate committee on Wednesday, for example, approved a higher nursing home tax to generate more revenues for the state's Medicaid program. The vote split largely along party lines, 11-3, but the measure's passage would be significant since the House already has passed a bill raising the tax per bed to $1,900 from $1,200 annually.

Gov. Bob Riley (R) originally had proposed raising the tax by twice as much, but a compromised was struck with the Alabama Nursing Home Association, according to a published report. Committee Chairman Roger Bedford (D-Russellville) predicted the measure would pass the full Senate because the state budget is in such dire need. The tax would generate about $13 million more in revenues locally, and another $32 million in federal matching funding.

Bush administration officials have called for an end to, or at minimum severe restriction of, such intergovernmental transfers.

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