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Calvo, Rodriguez at odds over hospital funding

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There are new developments in Adelup's effort to find a permanent funding source for the chronically cash-strapped hospital. Governor Eddie Calvo and Health committee chairman Senator Dennis Rodriguez, Jr. are now at odds over the lifting of the gross receipts tax exemption for wholesalers. The governor introduced a bill yesterday to impose the tax on various industries that have long been exempt. Rodriguez says he's concerned about the impact.

After months of trying to gain support for his plan to fund a hospital improvement bond by raising the business privilege tax from 4 percent to 4.75, the governor Thursday submitted a compromise measure that he said Speaker J Cruz and Rodriguez support. Calvo says his measure was drafted in collaboration with Rodriguez, and while it no longer calls for a tax increase, it instead removes the GRT exemptions from businesses such as wholesalers.

Now Rodriguez is backing off imposing taxes on wholesalers. He declined to be interviewed, and instead referred us to a news release saying lifting the exemption would put local companies at a disadvantage against non-tax paying off-island businesses.  He says it would also cost jobs and the very revenue the government is trying to raise.

Previously we spoke with Tim Kernaghan of wholesaler Dickerson and Quinn who explained another concern shared by Rodriguez, saying, "If a distributor sells to a retail account there is a gross receipts tax, if that retail sells to another retail account there's a gross receipts tax, and then if that retail account is a mom and pop store there's another gross receipts tax. So upwards of 12 percent under the current system would then attach to goods where as now its 4 percent."

Adelup responded with a statement from hospital medical director Dr. Vincent Duenas, who said the bill by the governor is the exact same legislation that Rodriguez had been circulating, and he was surprised by the change of heart. Dr. Duenas saying "as difficult as it may be, its incumbent upon leaders to give gmh the support it needs as both lives and accreditation are at stake."

Rodriguez says he wants a financial impact study done first, and will call for an oversight hearing on the hospital, not just over the modernization plan but over the delay in the birthing center and possible threats to accreditation.

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