Business & Economy

Fire departments struggle to pay new ambulance tax

Several nonprofit ambulance providers say they will not be able to pay a new tax that is part of a complicated formula for covering the cost of transporting Medicaid patients.

Rescue squads in Bennington, Alburgh, Middlebury and Milton all say they owe several thousand dollars to the state as part of the so-called ambulance tax, and they don’t know where they will get the money to pay it.

Lawmakers passed the tax on ambulance providers during the 2016 legislative session because several ambulance providers complained they were losing too much money from transporting Medicaid patients.

The House Ways and Means Committee, which writes taxes, then worked with the Department of Vermont Health Access, which administers Medicaid, to place a 3.3 percent tax on ambulance revenue, which would be refunded to rescue squads through higher reimbursement rates.

At the time, the Agency of Human Services predicted they would need $1.1 million from 79 ambulance providers to pull down federal matching money. They hoped to raise the amount Medicaid pays for ambulance services by $2.3 million — from 41 percent of what Medicare pays them to 80 percent of what Medicare pays them.

The Bennington Rescue Squad, one of the only vocal opponents of the tax, said in March it would be liable for $70,000 per year in exchange for an additional $138,000 in additional Medicaid money, but feared one day the increased revenue would dry up and they would still be left paying the tax.

The House Ways and Means Committee said early on it would only move forward with the tax if the Vermont Ambulance Association, which testified in favor at the time, was on board. But ambulance providers who are either outside the association or opposed it in the first place now say they were never consulted, and are not going to be able to pay the tax.

Ron Kumetz, the first assistant chief of the Alburgh Fire Department, said his organization lives “hand to mouth,” but now owes $3,000 to the Department of Vermont Health Access for revenue the organization took in from July 1, 2015, to June 30, 2016.

“We all owe them money for the last fiscal year that we didn’t have any chance — we had no real warning about this,” Kumetz said. “We had no way to budget for this.”

“Their excuse is the Vermont Ambulance Association knew,” Kumetz said. “The Vermont Ambulance Association didn’t notify us. We’re not a member, and we don’t really plan on becoming a member because they don’t represent our interests.”

The Alburgh Fire Department is a 501(c)(3) nonprofit organization. According to documents filed with the Internal Revenue Service, the organization took a $77,000 loss in fiscal year 2014, and a $40,000 loss in fiscal year 2013.

“In any other normal place (the Legislature) would have said, ‘Let’s put a 2-cent tax on cigarettes.’ Instead they decided to tax the ambulance services who really needed this more than anything else,” Kumetz said.

Jim Finger, the president of the Vermont Ambulance Association, said the vast majority of ambulance providers are part of the association, and leadership of association consulted its members before agreeing to the new tax.

Finger also said the association has been giving regular updates on the ambulance tax to its members. He said the increased Medicaid payments started at the beginning of fiscal year 2017, so the association advised members to save the extra revenue in order to pay the tax.

“Nobody wants a tax, but the (rescue squads) need the income, and hopefully most all will receive a valuable increase because we’re doubling their Medicaid income,” Finger said. “They’re welcome to call me.”

House Minority Leader Don Turner, R-Milton, is the chief of the fire department and rescue squad in Milton. He said the ambulance service owes between $6,000 and $7,000 for the ambulance tax.

“I have an operating budget to operate our fire department, and now I’ve got to come up with money that doesn’t appear in the budget for a tax that is retroactive,” Turner said.

Turner said he informed the Vermont Ambulance Association during the 2016 session that he opposed the tax. He said he understands that the Legislature was trying to get more federal money for the ambulances, but he worried the Medicaid increases would be temporary and the tax would be permanent.

Further south, Teena Betourney, the chief of Middlebury Regional Emergency and Medical Services, says they owe $27,000. The most recent IRS information shows the rescue service, also a nonprofit, lost $20,000 in fiscal year 2014 and $3,000 in fiscal year 2013.

“We’re trying to figure out what’s the best action to take and who’s the best person to speak to about it,” Betourney said, but every time her organization tries to complain to the state, they get “skirted around and told we should talk to this person or talk to somebody else.”

Steven Costantino, the commissioner of the Department of Vermont Health Access, said in a statement that the state can’t pick and choose which ambulance providers are hit with the tax. But he said the state is trying to be as flexible as possible.

“We have been making increased payments for services provided since July 1, while the tax is not due until later this spring,” Costantino said. “Second, if providers still have financial challenges, the legislation allows DVHA to grant a different payment schedule. Providers in this situation should submit a request to DVHA’s Commissioner in writing.”

(Correction: An earlier version of this story misstated Ron Kumetz’s title.)

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  • Lester French

    Another example of government out of control. How many ambulance squads are for profit and how many are defacto part of the town’s volunteer fire department?

    • Bill Hathaway

      There are very few for profit ambulance services in Vermont. Off the top of my head I think there are 2 or 3 for profit ambulance services. The majority are 501(c)3 non-profit and municipal (either a separate ambulance department or part of the Town’s Fire Department).

  • Zachary Kent

    This doesn’t make any sense at all. Tax the very organization that you are trying to help? Sounds like a larger, for-profit ambulance service lobbied for this to push the competition out of business.

  • Jim Christiansen

    Draw down that federal dollar no matter the consequence. Vermonts fiscal house of cards, with its foundation of federal funds dependent on Republicans and Mr. Trump, is beginning to show its cracks.

  • Every member of the legislature who voted for this ridiculous tax should be ashamed and resign. We as taxpayers and citizens can no longer accept “Unintended consequence” from under the Golden Dome. Local ambulance services and Rescue Squads need to concentrate on their mission, not additional regulation, paperwork and become tax collectors for the state.
    The folks that serve on rescue squads and fire departments- full time or volunteer- contend with enough- and contribute to their communities way more than we appreciate- They just don’t need to deal with this nonsense.
    It behooves EVERY member of the legislature to get to work on fixing this debacle, AND stop creating new problems.

    • edward letourneau

      They focus on non-problems, so they don’t have to tackle things like out of control school spending and thousands on Medicaid that are going to become a cost that we can’t afford when the republicans cut back the spending.

  • Irene Stewart

    Zuckerman, Ashe and other Progressives in the VT Senate, have voted for one new tax after another for years. There isn’t a tax increase or a new tax they do not like. This is one more example of a tax hurting our ambulance services in this state. This past gubernatorial election, a tax on all services was put on the table by Minter, which would have just added to the financial woes of the poor and middle class families. But they sit in the State House just thinking of what else they can grab. Just waiting to see what they will try this session. Very happy that Governor Scott will veto tax increases and new taxes. This love of taxes has to stop.

  • Tom Grout

    Who was it Harry browne who stated “The government is good at one thing;It know how to break your legs, and hand you a crutch and say “If it weren’t for the government you wouldn’t be able to walk”

  • Gary Murdock

    “We’re trying to figure out what’s the best action to take”

    This question coming from Middlebury of all places. Stop sending the same progressive democrats with the same progressive democrat idea’s back to the legislature, that’s a good first step!

  • rosemarie jackowski

    The entire Federal and State tax codes should be simplified. One of the reasons the Health Care System has failed is because it is unnecessarily complicated.

    Of all the bad things that can be said about Trump, maybe his texting is a good thing. Maybe our tax codes and laws should be written with so few ‘characters’. If it cannot fit on an index card, it has too many loop holes.

  • Dev Martin

    The rescue services ultimately received more money this fiscal year after reimbursement and matching funds than they did the previous year. They got the tax back, times 2, in advance. Now they get to keep half and pay the other half back.

  • Amazing that our legislature passed this tax, the governor signed it and no one knows about it. Until of course, VTDigger brings it to us.

  • Bill Hathaway

    A more in-depth story should be written as to how this tax actually works. There are a lot of moving parts. Basically, all ambulance services received a increase in their Medicaid reimbursements earlier this year to allow them to have the revenue to pay the tax. If those services pocketed the increase rather than set aside some of the increased revenue to pay the tax then it is their own fault that they do not have the funds to pay the tax. This type of tax is not a new concept and has been enacted in other states.

    • Kevin Creller

      Hey Bill, I think a basic disclaimer that you are an officer with the Vt. Ambulance Assoc. would have been appropriate, since you are obviously not offering an unbiased opinion of the situation. It appears that its ok with you to apply a tax retroactively that many volunteer rescue squads haven’t had the opportunity to budget for. According to you its done everywhere so that makes it right. We’re from the Government and were here to help always is a red flag. This is just another ill thought out tax scheme. Join the discussion.
      – Volunteer fireman 45yrs EMS 36yrs

      • Bill Hathaway

        Hi Kevin, sorry, I guess I should have disclosed my bad. But I was voicing my opinion and not that of the VAA. So I disagree that I am biased. More like better informed. So I guess that some services would have continued to receive the dismal reimbursement from Medicaid and receive no increase at all. Sometimes you have to give a little to get a little. I also have to disagree that they had no time to budget for. They received unbudgeted income yes? More than what the tax was. Therefore they should have been able to compensate for an unbudgeted expense. I also disagree that this was another ill thought out tax scheme. There was a lot of thought that went into this and a volunteer ambulance service member was part of the committee that studied this. Thank you for your service to your community.

        • Ron Kumetz

          Mr. Hathaway,
          I see (below) that you were part of Bennington Rescue so you are not a newcomer to the finances of emergency services. Having said that, I find your presumption that because I disagree with you that I am less informed to be somewhat arrogant.

          I am well aware that the state has been considering new taxes to finance its ill conceived health care plans for a long time. In January 2012 they received a report (which was presumably paid for with our tax dollars) from Pacific Health Policy Group which listed an ambulance tax as an options.

          The bottom line is this: the other tax advocates sold our souls for a temporary increase in rates. The tax codified in 33 VSA 1959 is permanent. It has no sunset and it is not in any way linked to an increase in the reimbursement rates.

          As a matter of note, the current director of Bennington Rescue (an MBA) has been one of the most vocal opponents of the tax along with Rep. Don Turner (also Chief of Milton Fire/Rescue).

          • Bill Hathaway

            I apologize, In no way did I intend to put you down, it was not my intent. I respect your opinion.

    • Amee Gotshall

      Kind of hard to “pocket the increase and set it aside”, when most 501c3 ambulance squads are financially strapped and barely making it, isn’t it? Which brings another question, how do you tax a non profit that is supposedly tax exempt?

      • Bill Hathaway

        Non-profits are not necessary tax exempt. For instance, when I was the director of Bennington Rescue, we had to have a article presented at town meeting and voted on by the public every 5 years to be exempt from property taxes.