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Georgia taxpayers contributed $72.4M to rural hospitals in 2023

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(The Center Square) — Georgians contributed $72.4 million to qualified rural hospitals for the 2023 tax year as part of a program that allows taxpayers to lessen their state income tax liability.

Established in 2017, the rural hospital tax credit allows taxpayers to lessen their state income tax liability through donations to rural hospitals. Taxpayers can either select a hospital, or one will be picked based on a need ranking.

According to a new audit from the Georgia Department of Audits & Accounts, there are 55 eligible hospitals. Of the eligible hospitals, 28 received more than $1 million in contributions in 2023, and nine received less than $500,000.

The audit revealed that contributions ranged from $52,000 to nearly $4 million for the year, and donors directed most of the contributions.

According to hospitals, most RHTC funds went to capital assets or operating expenses in 2022. Hospitals reported $40 million in unspent RHTC funds, close to the amount reported in 2021.

Twenty-five hospitals reported unspent funds, ranging from $10,000 to $7.2 million, according to the audit.

Auditors recommended that the Department of Revenue create a mechanism to amend contribution reports and that the Georgia HEART Hospital Program, which provides services ranging from marketing the tax credit to processing contributions, file amended reports when applicable. They also advised that DOR bolster controls related to unmade contributions and statutory limits specific to tax liability.

The Department of Revenue administers elements of the tax credit specific to taxpayer eligibility, and the Department of Community Health oversees elements specific to criteria for determining hospital eligibility. Both the DOR and the DCH agreed with the audit’s findings.

According to the audit, eight rural hospitals in Georgia have closed since 2010.

“Rural communities suffer from depopulation, resulting in fewer hospital patients,” according to the audit.

“Additionally, rural hospitals often have a high share of patients who either lack insurance or are on Medicaid, which has lower reimbursement rates than most group insurance,” the audit added. “In recent years, the COVID-19 pandemic and staffing shortages have also negatively impacted hospitals’ finances.”

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