The 2nd meeting of the Subcommittee on Taxation of the Special Advisory Commission of Senior Citizens was held on Thursday, November 1, 2007, at 2:30 PM, in the Kentucky room I at Capitol Plaza Hotel. Bertha Daniels, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Bertha Daniels, Chair; Douglas Cole, Sally Davis, Rowena Emerson, Gayle Lawson, Pete McNeill, Jack Niece, Elmer Olson, Kenneth Overhults, LaVerne Ryan, Berton Sisk, Martha Smith, Donald Stethen, and Alban Wheeler.
Guests: Commissioner Debbie Anderson, Department for Aging and Independent Living; Perry Nutt, Economist, Legislative Research Commission.
LRC Staff: Charlotte Quarles and Sheri Mahan.
Mr. McNeil moved that the minutes from the previous meeting be approved as written. The motion was seconded by Mr. Niece. The motion carried by voice vote.
Commissioner Debbie Anderson of the Department for Aging and Independent Living discussed the cost of nursing home care compared to in-home care cost in Kentucky. She provided a brief overview of the care provided by nursing homes and the average length of stay for nursing home residents, which is 892.4 days. Commissioner Anderson then compared the cost of care in an institutional setting versus a community setting. The average Medicaid cost for nursing facility care per year in Kentucky is as follows: Nursing facility $34,453; Intermediate care facility for mental retardation and developmental disabilities $174,356; Acquired brain injury $67,553. The average cost per year for home or community based waiver care is as follows: Home based care for the frail and elderly $4,758; Individuals with mental retardation/developmental disabilities $17,099; Acquired brain injury $7,562. She stated that 70.8% of all Medicaid long term care funds go to institutional settings and 29.2% go to community based services.
Commissioner Anderson discussed the Kentucky rate per one hour unit for Community Services. The Medicaid rates for adult day services are $10 per hour and AAA is $9.62. Homecare services are $26.00 per hour for Medicaid and $22.06 for AAA. The personal care attendant program is $11.50 per hour for Medicaid and $7.23 for AAA. Companion care services for Medicaid are $22.12 per hour and $15.71 per hour for AAA.
Finally, the Commissioner provided national averages for elderly care services (based on MetLife insurance 2006 statistics). The average daily rate for a private room in a nursing facility is $206.00 per day or $75,190 annually. The average daily rate for a semiprivate room in a nursing facility is $183.00 or $66,795 annually. The average hourly rate for home health care aides is $19.00, and the average hourly rate for homemakers/companions if $17.00.
Chairman Daniels discussed the benefits of the elder care tax credit. Commissioner Anderson said that Governor Fletcher is in support of a tax credit for home caregivers of Alzheimer's patients.
Mr. Cole asked if other forms of governmental aid are taken into consideration when determining who qualifies for Medicaid services. Commissioner Anderson replied that no, other factors are not taken into consideration and she discussed the determining factors for eligibility.
Ms. Lawson asked for further explanation of the personal care attendant program. Commissioner Anderson provided additional details of this state run program.
Mr. Huff asked if there is a directory of qualified caregivers that is available to the public. Commissioner Anderson responded that currently there is not a directory, but that one is in development.
Mr. Cole asked if a caregiver can receive both a salary and the money the elderly person would have received for care. Commissioner Anderson replied yes, that would be considered a family care home. She then explained the level of care received at a family care home facility.
Next, Perry Nutt, economist for the Legislative Research Commission, discussed the cigarette excise tax. Mr. Nutt discussed the average excise tax increase nation wide between 2000 - 2007. The average increase was $.75 per pack. Six states had no increase. The nation wide average cigarette excise tax rate is $1.07 per pack. Mr. Nutt then compared the Kentucky excise tax rate with the surrounding states. He stated that states which surround Kentucky, with the exception of Missouri, increased their cigarette excise tax. Ohio had the largest increase of $1.00 per pack, with Kentucky having the smallest increase with $.27 per pack. The average increase was $.52 per pack. The average excise tax rate for the surrounding states is $.70 per pack.
Mr. Nutt then discussed Kentucky's cigarette excise tax receipts, discussing the historical trends and recent revenues. He states that in FY 06, which was the first full year of implementation of the $.30 excise tax, the receipts were $172 million. Kentucky expects slightly over $180 million in receipts in FY 08 and close to $190 million in FY 09. He detailed how the cigarette excise tax revenues is distributed, with 95% going to the General Fund, 3% to the University of Kentucky and the University of Louisville for cancer research, and 2% to the University of Kentucky for tobacco research. Mr. Nutt stated that generally for ever penny increase in the cigarette excise tax, that between $5 and $6 are generated, as long as the Kentucky excise rate is below surrounding states.
Mr. Wheeler asked if the increase in the cigarette excise tax has lead to a decrease in consumption. Mr. Nutt replied that there has been a reduction from 700 million packs sold prior to the tax increase to 635 million pack sold currently.
Chairman Daniels discussed the need to find a new sponsor for the elder care credit bill. She asked staff to provide the committee with a list of Appropriations and Revenue committee House members and a copy of the bill as proposed during the last Regular Session.
The second day of the Subcommittee on Taxation of the Special Advisory Commission of Senior Citizens was held on Friday, November 2, 2007, at 8:30 a.m., in the Kentucky Room I at the Capitol Plaza Holiday Inn. Bertha Daniels, Chair, called the meeting to order and the secretary called the roll.
Present were:
Members: Bertha Daniels, Chair; Douglas Cole, Sally Davis, Rowena Emerson, Gayle Lawson, Pete McNeill, Jack Niece, Elmer Olson, Kenneth Overhults, LaVerne Ryan, Berton Sisk, Martha Smith, Donald Stethen, and Alban Wheeler.
LRC Staff: Charlotte Quarles and Sheri Mahan.
The members discussed the recommendations for the subcommittee.
The committee discussed maintaining the current level of services provided by the Area Agencies on Aging, and requesting that the General Assembly increase the funding for senior programs by at least 20% in the upcoming biennium and continue to look for additional funding sources. Mr. McNeil moved for the adoption of this recommendation as their first recommendation. The motion was seconded by Mr. Sisk. The motion carried by voice vote.
The committee discussed urging the General Assembly to enact a 2 cent increase in the cigarette tax to be earmarked for funding senior services. Ms. Lawson moved for the adoption of this recommendation as the second recommendation. The motion was seconded by Mr. Cole. The motion carried by voice vote.
Finally, the committee discussed urging the General Assembly to enact legislation similar to the elder care credit bills which have been introduced in the last three regular sessions. This bill would provide income tax credits to those who care for the elderly in the elderly person's home, or in the caregiver's home. Also, additional attention should be given to the amount of income that can be earned to qualify for the credit. Mr. Cole moved for the adoption of this recommendation as the third recommendation. Mr. Wheeler seconded the motion. The motion carried by voice vote.
Chairman Daniels asked for volunteers to form a committee to meet with legislators regarding the elder care tax credit bill. Ms. Davis volunteered to serve on the committee.
Being no further business, the meeting was adjourned at 9:45 p.m.