Fast food tax to save NJ hospitals?

April 29, 2008 6:31:35 PM PDT
Can a Big Mac tax save New Jersey hospitals? New Jersey Governor Jon Corzine said Tuesday he's open to using a "sin tax" to help provide funding for struggling hospitals.

His comments came after Amy Mansue, of Children's Specialized Hospital, suggested a fast food tax during a meeting between Corzine and hospital leaders on proposed state hospital and health care aid cuts.

Corzine called it "a constructive suggestion."

"We would be happy to examine that and debate that with the Legislature," Corzine said.

But Senate President Richard J. Codey said he wouldn't favor a fast food tax.

"That's a tax on poorer people and people with kids," said Codey, D-Essex.

Detroit weighed a 2 percent tax on sales at fast-food establishments in 2005, but the plan didn't become law.

Justin Wilson of The Center for Consumer Freedom in Washington, D.C. said no state or municipality has enacted a fast food tax. He said the tax would raise little money, especially during economic woes.

"Now is the last time anyone should be promoting such a regressive tax that targets some of the lowest income groups," Wilson said.

New Jersey already taxes cigarettes and alcohol. It has the nation's highest cigarette tax, at $2.58 per pack, and uses money from it on health programs.

The fast food tax idea came as hospitals warned Corzine slicing aid would bring closed hospitals, lost jobs and longer waits for medical care.

The governor insisted he had little choice.

"I don't like it any more than you do, but I think it is absolutely essential that we get our fiscal house in order," Corzine said at New Jersey Hospital Association headquarters.

Corzine proposed a 14 percent cut in state aid for hospitals in his $33 billion budget plan.

They're part of $2.7 billion in proposed cuts to try to fix finances plagued by deficits and high debt and taxes.

But the New Jersey Hospital Association noted 22 New Jersey hospitals have closed since 1992, including six in the last 18 months with two more planned. Of the 76 remaining hospitals, half lost money last year, it said.

Much of the cut would come from money provided to help treat the state's 1.5 million uninsured residents.

"That's like asking all restaurants to feed the poor and not paying them anything," said Betsy Ryan, the association's chief operating officer.

She said each hospital closing, on average, will mean 1,700 lost jobs.

"And whole communities across the state will lose the services of their local hospitals," Ryan said.

Rich Miller, president of Virtua Health in Voorhees, said the cut "cripples every single facility in this state." He said his hospital would lose $1 million.

"We look at seven-digit cuts and we try to figure out how many of our employees will have to be let go and what services will have to axed," he said.

Corzine also proposed cutting state funding for graduate medical education, cancer research, adult day care health services and nursing homes.

"We are going to have one heck of a crisis on our hands," said John Lloyd, president of Meridian Health System, which runs hospitals in Monmouth and Ocean counties.

Ryan gave Corzine more than 4,000 letters protesting the cuts. The group also plans a May 12 Statehouse rally.

But Corzine said the state and hospitals need to become more efficient.

"We have been living in an intensive care unit for a long time financially and we ignored it," Corzine said.