Thursday, December 1, 2011

Taxing Public Health Services

As previously discussed, the City of Tacoma is facing a significant budget gap.  While the size of the hole is projected at $31M, the City Council had decided that it would focus on repairing $23M of that now - provided that no new revenue options were on the table.  However, the Council is now seriously considering additional sources of revenue. 

The City Council's Government, Performance & Finance Committee put forward a series of tax proposals, including one that targeted five specific businesses in Tacoma within the non-profit health care sector.  With the support of business partners Multicare, Franciscan, Community Health Care, and SeaMar; the Chamber contacted the City about the potential impacts to the community and these businesses.

In the City's rush to find revenues, it significantly misunderstood the hardship that adding a B&O tax to non-profit health services would cause.  In an effort to maintain care levels, Multicare alone just eliminated over 500 positions - far more than the City is contemplating in even the most dire scenarios.  With an increase in their taxes, it would undoubtably equate to even more jobs at a time when more and more people are depending on the charity care provided by these non-profit providers.

Thankfully, at the City Council's study session on November 22nd, Councilmember Jake Fey proposed taking this tax increase off the table due to its inequitable nature of targeting specific businesses and targeting the needy.  While the majority of the Council appeared to support this position, Councilmember Ryan Mello made a last minute effort to retain the option by sending it back to committee for further review.

That means that this effort is not done.  On December 7th, they will again take up this targeted tax increase in committee.  With its partners, the Chamber will continue to advocate for an equitable distribution of any new taxes that the City imposes.  As our partners, we hope you will join us in voicing your concerns to the City Council.

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