ATLANTA — A Georgia lawmaker who sponsored a new tax break for individuals and corporations who give donations to rural hospitals now wants to make those incentives larger.
Rural hospitals across Georgia are struggling and several have closed their doors in recent years. Hoping to give them a financial lifeline, state lawmakers last year approved a new tax credit allowing donors to reduce their tax bills by 70 percent of the amount they give to small-town hospitals.
But the credits haven’t attracted many donors so far. The Atlanta Journal-Constitution reported Friday (http://bit.ly/2iPxGhU ) the Department of Revenue so far has received applications for only $860,955 in tax credits — less than 2 percent of the $50 million allocated for the program’s first year.
“Our rural communities cannot afford for this not to be a success,” said state Rep. Geoff Duncan, R-Cumming, who sponsored the hospital tax incentives last year.
Now Duncan has a new bill that would increase the value of the tax credits from 70 percent of a donation’s amount to 90 percent. Duncan would maintain current limits on the amount of the credit to individuals at $2,500, while corporations can’t get back more than 75 percent of their income tax liability.
The rural hospital tax credits have only been available for a short time, since Jan. 3. Still, a similar tax break Georgia offers for private school scholarship donations typically reaches its spending limit the first day it’s available each year.
Lawmakers allocated $180 million for the rural hospital credits through 2019 — including $50 million this year. Qualified hospitals can receive up to $4 million in donations that are eligible for the tax credits.
Jimmy Lewis, the CEO of rural hospital coalition Hometown Health, says the 70-percent credit has been too low to attract much interest from corporate donors.
“We’ve come to recognize that the bill as passed last year is a great concept,” Lewis said. “The practical parameters built in are a no-go.”
Lewis said it’s hard to persuade corporations to give to rural hospitals when they know “you will lose 30 percent off the top.”
A similar bill aiming to fix the rural hospital credit has been filed in the Senate.
Duncan’s House bill would also require hospitals to disclose how much they pay any consultants hired to attract donors. Legislative leaders have criticized an Atlanta-area consultant who signed up two-thirds of the rural hospitals eligible for the tax credits. The consultant gets 6 percent of any donations received.
Jim Kelly, the consultant, has said small hospitals often lack the staff and expertise to conduct fundraising and do the paperwork needed to apply for the tax credit.
Duncan said his proposal won’t prevent hospitals from hiring consultants.
“I didn’t want to pick winners and losers, and I didn’t want to meddle in the free markets,” Duncan said. “All I wanted to do with this was create transparency.”
This story has been corrected to remove inaccurate reference to 20 percent in lede.
Information from: The Atlanta Journal-Constitution, http://www.ajc.com