HARRISBURG, Pa. (WHTM) – It was a mere 12-second comment in Governor Tom Wolf’s 35-minute budget address.
“Increasing the sales tax from 6 to 6.6 percent, while broadening the base to include services that currently are not taxed, because special interest groups have lobbied for special exemptions,” Wolf proposed to the General Assembly Tuesday.
The three key words are broadening the base. That’s politician speak for taxing more things. It’s said the devil is in the details and one of the devils, according to critics, is a tax on seniors in nursing homes and assisted living facilities.
“My first reaction was this is huge,” said Ron Barth, President and CEO of LeadingAge Pa, a trade association representing not-for-profit senior facilities. “We were surprised by it.”
Surprised and sticker shocked, Barth says senior facilities typically cost between $8,000 and $10,000 a month. If a 6.6 percent tax is added, it would drive costs up between $6,000 and $8,000 a year.
“The concern is that this is a huge tax on residents because that’s who’s gonna pay it? It’s a sales tax on the consumer,” Barth said.
The governor’s office refutes Barth’s claim and accuses him of fuzzy math.
“The numbers being pushed by this group are dishonest,” Wolf spokesman Jeff Sheridan said in a statement. “According to the Kaiser Family Foundation, almost two-thirds of nursing home residents have their care paid for through Medicaid. Medicare picks up 12 percent and private or other sources pick up the remaining costs. The actual average cost of nursing home care for most residents is one-fourth of the costs quoted by this group.”
But Barth says it’s that statement, not his numbers, that’s completely wrong. He adds that Wolf’s proposed sales tax isn’t just being tweaked from 6 to 6.6 percent, as it is on some items. For senior care, it’s going from zero to 6.6 percent.
“That’s a lot of money,” Barth said. “And a lot of these people are on fixed incomes, have their pensions maybe, some savings, but many of them will run out of funds eventually and have to go on Medicaid, and this is just going to speed up that process.”
In his statement, Sheridan pointed out that Wolf’s budget proposal also has lots of goodies for seniors, from property tax elimination to increased funding for in-home health care.
It is, of course, just a proposal. The legislature, dominated by tax-averse Republicans, will have its say on any new tax proposals.