Quorum Report: Local Tax Collections Would be Boosted by $2.1b under Medicaid Expansion, According to New Report

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February 18, 2013 9:27 AM

LOCAL TAX COLLECTIONS WOULD BE BOOSTED BY $2.1B UNDER MEDICAID EXPANSION, ACCORDING TO NEW REPORT
Former chief revenue estimator Billy Hamilton follows up on his earlier economic impact report, releases numbers showing positive impact of $23 billion in federal aid over next four years on local jurisdictions’ tax revenue.

In a follow to his report making the economic argument for Texas to accept the Medicaid expansion, former chief revenue estimator Billy Hamilton has released data showing local tax revenue across Texas would increase by $2.1 billion as a result of $23 billion in new federal health care spending over the next four years attached to extended coverage of low-income adults.

The Hamilton report was commissioned by the interfaith group Texas Impact and Methodist Healthcare Ministries of South Texas, Inc. (QR wrote about the first Hamilton report on its release Jan. 28).

The attraction today is the dissemination of detailed data on the expected increase in local tax revenue broken down for each House and Senate district. With pressure increasing from outside groups on legislators to accept the enhanced coverage authorized by the federal Affordable Care Act, the new numbers attempt to demonstrate how much each lawmaker stands to gain by changing the state’s position against expansion.

For instance, in House Appropriations Chairman Jim Pitts’ HD 10, federal spending connected with Medicaid expansion is expected to generate $11.8 million in new local tax revenue from 2014 through 2017, according to Hamilton’s numbers.

Assuming a scenario with a moderate uptake rate in enrollment, the Hamilton study expects 3,679 low-income adults to gain coverage in Pitts’ district. That would bring in $84.1 million in federal funds over the next four years on a state match of $4.7 million.

It’s hoped that increased coverage will eat significantly into local jurisdictions’ costs for unreimbursed charity care in hospitals and local jails. Those costs in HD 10 were estimated $7 million, according to the Hamilton report.

“These new estimates should help legislators understand how much their own districts will benefit directly from extending Medicaid to low-income adults,” said Texas Impact Executive Director Bee Moorhead in a statement accompanying the report. “As if saving local taxpayers millions on low-income care isn’t enough, lawmakers can actually bring new revenues to their districts without raising taxes-and make their constituents healthier in the process.”

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