Mass. Gov. Romney Nixes LTC Tax Break

December 23, 2004

Massachusetts Gov. Mitt Romney is blocking a bill that Democratic lawmakers hoped would expand access to insurance for long term care, saying the state can’t afford a tax cut that would cause a $10 million annual loss of revenue.

Romney said he opposed two sections of the bill.

One would allow anyone with long term care insurance to exempt the annual deductible, up to $5,000, from their taxes.

“Given that the value of the tax deduction will most likely go to those who are already insured, this provision seemingly amounts to a subsidy for individuals with relatively higher incomes,” Romney said in a letter to lawmakers. “The projected annual tax revenue loss for the Commonwealth is approximately $10 million, a cost that I cannot prudently accept at this time.”

The second section calls for the creation of a plan for long term care insurance for state workers.

Romney said that although premium costs would be withheld from the salaries of state employees participating in the plan, the bill doesn’t address any other costs to the state associated with the proposal.

“While I support the concept of extending the option of long term care insurance to state employees, the Commonwealth should not bear the administrative costs associated with the implementation of the proposed plan,” he wrote.

Romney sent the bill back to lawmakers after rejecting the two sections.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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