News from the Tennessee Valley State, Local and National news

Riley touts health care insurance proposal
Plan would offer tax breaks
to help small businesses

By Jay Reeves
Associated Press Writer

HOOVER — Gov. Bob Riley asked business leaders Thursday to lobby legislators to support a plan he said will expand health insurance coverage for small companies through tax breaks without hurting state revenues.

The move was a pre-emptive move by Riley, who said he expects a "huge debate" over the proposal because it could take money from state schools unless economic growth and other revenues make up the projected cost of $13 million.

Speaking at a meeting of the Chambers of Commerce Association of Alabama, Riley said his plan — which would apply to businesses with 25 or fewer employees, allowing them and their workers to deduct twice the amount they pay for health coverage — was vital to both expanding business in the state and shoring up the state's medical network.

More than 650,000 Alabamians don't have health insurance, he said, and more than half the people working for small businesses lack health coverage because companies can't afford rising costs.

"We cannot afford for more and more small businesses in this state to be jeopardized because of health insurance premiums," said Riley.

Estimating the cost of the plan at $13 million, Riley said he expects debate over whether the state can afford the lost revenue. But economic growth should make up the difference by increasing other revenues, he said.

"I hope for bipartisan support if we can prove that it will not hurt revenues," said Riley.

The head of the state teachers' union, Paul Hubbert, said he favors exanding health insurance coverage, but opposes doing it in a way that would reduce income tax revenues, which are used to fund education.

"We certainly think all employees should be covered but it shouldn't be at the expense of their children's education," said Hubbert, executive secretary of the Alabama Education Association. He said one way to fund the program would be to look at removing the sales tax exemptions some types of businesses receive.

Riley's revenue commissioner, Tom Surtees, said the administration had yet to compile firm estimates on projected revenues over the five years the health insurance plan would be phased in.

Riley said he had yet to discuss the proposal with teacher lobbyist Paul Hubbert, who typically opposes any legislation that would cut school revenues.

Hubbert did not immediately return a message seeking comment.

Rick Roden, head of the chamber of commerce in Jackson County and the outgoing chairman of the state chamber of commerce board, said insurance costs are killing small businesses.

"There's no question something has to be done," he said.

The Chambers of Commerce Association last year supported the re-election of Riley, who included the insurance proposal in his platform.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Save $84.50 a year off our newsstand price:
Subscribe today for only 38 cents a day!

Leave feedback
on this or

Email This Page