Indiana Court Declares Tax Used To Fund Medicaid Unconstitutional

A statewide property tax used to help fund Indiana's Medicaid program was declared unconstitutional April 3 by an Indiana Tax Court judge, the Indianapolis Star reports. Judge Thomas Fisher said that the tax, known as the Hospital Care for the Indigent tax, is illegal because homeowners with properties of "similar values" pay "vastly different" taxes. He added that the levy is an "illegal state tax masquerading as a local property tax." The Star reports that three counties in the state pay more than half of the indigent health care taxes each year. The state stands to lose as much as $21.7 million a year because of the ruling, John Render, general counsel for the Indiana Hospital and Health Association, said. But officials from Lake County said the tax could be made legal if the state applied it equally to taxpayers. State Medicaid officials said they are still reviewing the ruling and plan to appeal the decision to the Indiana Supreme Court. Until such an appeal is heard, the state can continue to impose the tax because Fisher did not issue an order against its collection (Corcoran, Indianapolis Star, 4/4).