Putting money back on Main Street

Florence Morning News
April 17, 2015

FRANK KNAPP JR. Guest columnist

In years past, tax season meant that car dealerships could expect a bump in sales in pre-owned vehicles due to individual refunds being used as down payments on vehicles. The refunds gave many of our lower-income citizens the cash necessary to purchase the family car or work truck they needed.

This annual increase in sales was also important to small-business owners of new or used car dealerships. It helped them at a particular slow sales time of the year, boosted the incomes of sales people working on commissions and generated sales for other retailers and service providers catering to the automotive business.

Unfortunately this tax refund tradition for car sales has all but ended.

One owner of a pre-owned vehicle dealership in Columbia for the past 25 years tells me his theory as to what has changed.

He believes that the sizeable IRS checks his customers used to receive are smaller now because of the federal government garnishing taxpayer refunds for unpaid hospital medical bills.

No one should complain that hospitals have stepped up their efforts to use garnishment of tax refunds as a way of recouping the cost of their services for the uninsured. Hospital services are not free, and support from the federal government is being diminished. What the uninsured patient can’t afford to pay, the rest of us with insurance will eventually pay through higher premiums.

However, the economic hit to local economies and individuals is significant. Less money flowing through our communities hurts our small businesses on Main Street.

The good news is that we can return to the days when our low-income citizens receive healthy tax refunds that in turn fuel our local economies and at the same time make sure that hospitals are fairly compensated for their services. All we have to do is convince the members of the South Carolina General Assembly to accept the offered federal funds to provide affordable health insurance to our low-income, uninsured citizens.

Every day South Carolina turns down approximately $4.7 million federal dollars that we can use to help 194,000 of our low-income, uninsured in our state who fall into our health insurance coverage gap. Most of these citizens have jobs and do not qualify for our current state Medicaid program, which serves only working parents with incomes below 62 percent of the federal poverty level. Unfortunately those in the coverage gap also make below 100 percent of the federal poverty level thus not qualifying for premium assistance (federal tax credits) to purchase insurance in the state’s health insurance marketplace.

Other states also have coverage gaps like ours, but many of them have either agreed to accept the federal funds or are currently crafting programs to do so. Thirteen of these states have Republican governors or GOP-led legislatures. They have found a way to close their coverage gaps most recently by crafting private health insurance options for their low-income uninsured.

A just released report by the Robert Wood Johnson Foundation reveals that, aside from boosting their economies, these states will even likely completely pay the eventually 10 percent cost of their programs required by federal law. These savings will come from within their state-run health care services for mental and behavioral health programs, public health programs and inpatient health care services for prisoners.

Close the Gap SC is a coalition of nonprofit organizations that is advocating South Carolina join the growing number of states that are accepting the federal funds to help their low-income, uninsured. Doing so is good public and economic policy, especially with a University of South Carolina study projecting up to 44,000 new jobs to be created in our state from the influx of the federal dollars. Such a jump in employment would give the state more tax receipts that could be earmarked for education or infrastructure.

Now with the elimination of concern about South Carolina funding part of this effort with state tax dollars, our concern should now be for better health care for our low-income citizens and putting more money on Main Street to help our small businesses. The state should accept the federal funds and close our coverage gap this year.

Frank Knapp Jr. is the president, CEO and co-founder of the South Carolina Small Business Chamber of Commerce, which is a member of the Close the Gap SC coalition (closethegapsc.org).


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