The Senate Finance Committee late last week approved a federal tax bill that includes a provision to eliminate the $150 million cap on the amount of tax-exempt revenue bonds certain not-for-profit hospitals can have outstanding.
The House Ways and Means Committee earlier this month passed a less generous provision relating to the bond cap. The House plan would increase by $10 million a year from fiscal 1998 through 2002 after which the cap would stay at $200 million.
The Congressional Budget Office estimated the Senate plan would cost the federal government about $315 million in lost tax revenues over five years. The CBO said the House plan would cost the government $126 million in lost tax revenues.
Hospital groups say the elimination of the cap is necessary because as not-for-profits join together in integrated systems they are increasingly bumping up against the cap, causing some deals to be altered or scrapped.
The Senate Finance Committee also voted to raise cigarette taxes by 20 cents a pack and spend more than half the revenues to expand children's healthcare.