January 31, 2005

A "Little Side Step" Means You Get Stomped On! The Bed Tax and New Mexico.

Ooo I love to dance a little sidestep,
Now they see me, now they don't,
I've come and gone,
AND Oooo I love to sweep around the wide step,
Cut a little swathe and lead the people on."

- "The Sidestep," sung by the Governor in The Best Little Whorehouse in Texas

Remember that little song and dance routine in the movie, The Best Little Whorehouse in Texas? The Governor is exulting over his ability to pull the wool over people's eyes.

When will we ever learn about the promises of politicians when it comes to taxes? You may know that New Mexico passed a $8.82-a-day bed tax on nursing homes back in 2004. In order to get it passed, the governor:

...agreed to increase the state's Medicaid reimbursements to New Mexico's 80 nursing homes to cover the cost of the tax, so it would, in effect, be a wash for the homes. The tax was to be paid to the state by the nursing homes, which would then have the option of passing it on to their patients.

The administration also agreed to a bill that would allow the state's 1,200 to 1,500 private pay nursing home residents to deduct the $3,219-a-year tax from their state income taxes by applying for a tax credit.

MSNBC is reporting that the governor wants to take it back. No--not the bed tax. He wants to go back on his word about the tax credit that the private pay nursing home residents are presently allowed.

The idea was that passing such a bed tax would allow the state to get a three-to-one match in federal Medicaid dollars. The Feds were on to that when:

...the Centers For Medicare & Medicaid Services, the federal agency that administers the Medicaid program, ruled that portions of it were illegal under federal law and that the agency would not provide the three-to-one funding match.

It is illegal under federal law to reimburse taxpayers for such taxes, and federal Medicaid officials cited the tax credit as a flaw in the program.

The governor is fighting to preserve the tax and do away with the credit. The legislators who tried to warn that CMS would never accept the plan as written are fighting to do away with the entire tax.

Here's government at work--pass a tax with promises you've been warned you can't, by law, keep--and then do away with the promises--but keep the tax. That's a new twist on the old "read my lips" approach.

What do you bet that the Medicaid reimbursement increase either doesn't happen or that there is an attempt to take it back?