SALEM — The Oregon Legislature is nearing a vote on extending a tax on hospitals and nursing homes, but Senate Republicans are vowing to block it in hopes of extracting tougher cuts to public-employee pensions.
The state House is scheduled to vote today on the tax, which is projected to raise about $2.1 billion over the next two years. The money provides a big chunk of the funding for the Oregon Health Plan, the state's Medicaid program for low-income Oregon residents.
Hospitals and most nursing homes support the measure. The tax dollars they pay are matched by the federal government and ultimately come back to them in the form of reimbursements for the care they provide for Medicaid patients.
The tax was created in 2003 and was extended several times. The latest version expires this year. The extension will need votes from both parties to reach the supermajority required to pass bills that raise revenue. If majority Democrats all support it, at least two Republican votes in each chamber will be needed to reach the three-fifths threshold.
Senate Republicans said Monday that they won't support any bill that raises revenue unless Democrats agree to steeper cuts to retirement benefits for retired government workers.
Gov. John Kitzhaber signed a Democrat-backed bill last month that would save state and local governments $460 million in pension costs over the next two years. Republicans have pushed for more than $1 billion in pension savings, saying the rising costs of pensions is threatening investments in education and other government services.
"I am concerned that the majority party believes we can get out of here without addressing those things, and we cannot," said Sen. Larry George, R-Sherwood.
The latest iteration of the hospital tax would continue the existing 4.3 percent assessment applied to the net revenue of some hospitals. It would also add an additional 1 percent tax to create a new fund that would be used to reward hospitals that meet certain performance metrics. Altogether, hospitals stand to pay an estimated $745 million and earn back $2 billion.
The nursing home tax will be extended to cover nearly all occupied nursing home beds in the state; exemptions for nursing homes that have a large number of Medicaid patients or those with none will be removed. Nursing homes are projected to pay $128 million over the next two years and earn back $346 million in enhanced Medicaid reimbursements.
Legislators said the plan has angered a handful of nursing homes that don't take Medicaid patients.
"We're leaving money on the table with the feds, and we think everyone should be chipping in a little," said Sen. Elizabeth Steiner-Hayward, D-Portland.