Arizona voters face a critical decision over the next several weeks, as early voting begins leading up to a May 18 special election on Proposition 100. Prop. 100 asks voters to approve a temporary - three-year - 1-cent increase in Arizona's sales tax. The funds generated by the tax increase will protect our educational, health-care and public-safety organizations from the full impact of spending cuts our legislators and governor recently made to balance the state budget. This sales-tax increase is modest, temporary and will help our state's core institutions to stabilize as the state's economy recovers.
If voters reject Prop. 100, our physicians, hospitals and other health-care professionals will be subject to an additional 10 percent cut in payments for care they provide to patients enrolled in our state's Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). As a result, hospitals and other caregivers will lose $342 million per year in state and federal matching funds. Without these revenues, hospitals will face tough choices. They may be forced to cut back on services to their communities and eliminate jobs - decisions that not only harm health care, but take our economy in the wrong direction.
The state has already made significant cuts in AHCCCS payments to hospitals. Arizona's hospitals are now paid just 76 percent of the cost of providing care to AHCCCS patients. Hospitals must cut services, lay off staff or shift costs onto private health insurance plans. The Arizona Hospital and Healthcare Association, an affiliate of the American Hospital Association, has long argued that this represents a hidden health-care tax on businesses and families, who end up paying more for private health insurance as a result.
Prop. 100 is not a permanent increase, nor does it provide a permanent solution to our state's budget problems. Proposition 100 will, however, serve as a bridge over some troubled fiscal waters we face in the next three years and provide stability for our core institutions as the state's economy rebuilds.
Arizona's hospital community is a proven economic catalyst for the state. Our hospitals employ more than 80,000 people and contribute $11.5 billion to the gross state product. Hospital employees account for 7 percent of Arizona's wages and salaries. In fact, our hospitals have added thousands of jobs during the most severe times of our state's recession economy.
A temporary increase in the state's sales tax is a practical solution to today's economic challenges.
Arizona's hospitals wholeheartedly endorse Prop. 100 and ask for your support by voting "Yes" on Prop. 100.
EDITOR'S NOTE: This week the Star's editorial board will be running daily, paired guest opinions about Proposition 100, the 1-cent-per-dollar sales-tax increase that will be on the ballot on May 18. We've invited proponents and opponents with expertise in business, health care, education policy and more to set out their views on specifically why the tax increase is needed or why it is not a good idea. We're running their views as they were written, edited only for grammar and style. The series will run daily through Saturday.