FISCAL NOTE
FUND(S):
Medicaid State Share Fund
Sources of Revenue:
Other Fund Medicaid State Share Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to decrease the nursing home provider tax to five and one-half percent by November 1, 2007 to comply with federal law.
As written, this bill would reduce the Health Care Provider Tax on providers of nursing facility services from 5.95 percent to 5.50 percent. The reduced tax rate would apply to gross receipts received after October 31, 2007. According to our interpretation, the reduced tax rate will reduce revenue for the Medicaid State Share Fund by roughly $1.9 million in Fiscal Year 2008 and by roughly $3.5 million in Fiscal Year 2009. However, in the absence of this proposed legislation, the loss in matching Federal Funds could be in excess of $100 million per year due to the provisions of the federal mandate.
Additional administrative costs to the State Tax Department attributable to this bill would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-1,900,000 |
-4,200,000 |
Explanation of above estimates (including long-range effect):
As written, this bill would reduce the Health Care Provider Tax on providers of nursing facility services from 5.95 percent to 5.50 percent. The reduced tax rate would apply to gross receipts received after October 31, 2007. According to our interpretation, the reduced tax rate will reduce revenue for the Medicaid State Share Fund by roughly $1.9 million in Fiscal Year 2008 and by roughly $3.5 million in Fiscal Year 2009. However, in the absence of this proposed legislation, the loss in matching Federal Funds could be in excess of $100 million per year due to the provisions of the federal mandate.
Additional administrative costs to the State Tax Department attributable to this bill would be minimal.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us