November 17, 2017, Lois Bowers, McKnight's Senior Living - Provider groups continued to express concerns over provisions in the $1.5 trillion tax reform legislation that passed 227-205 Thursday in the House of Representatives and in the tax reform bill under consideration in the Senate.
LeadingAge said Thursday that it was “profoundly disappointed” that H.R. 1, the Tax Cuts and Jobs Act, eliminates the medical expenses deduction, which helps older adults reduce their out-of-pocket expenses, and ends the private activity bond exemption, which would result in fewer life plan community and affordable housing projects being undertaken.
“Eliminating certain low income tax credits (because of the bill's ending of tax exemptions for private activity bonds), coupled with the lowering of the corporate tax rate, would result in two-thirds fewer housing credit homes being built,” the organization said in a statement.
Almost 30% of housing credit apartments are senior households, according to LeadingAge.
“For life plan communities, the elimination of private activity tax exempt bond financing removes the primary source of capital for property development and would increase the cost capital by 25 to 35%,” the organization said. “And it removes tax-exempt advance refunding bonds, which are a significant way that life plan communities take advantage of lower rates. Ultimately, this means higher costs for seniors.”
The American Health Care Association/National Center for Assisted Living said Thursday that its concerns remained about the bill provision eliminating private activity bonds, originally expressed in a Nov. 8 statement.
“Private activity bonds are a critical form of tax-exempt financing which long-term care providers utilize to fund new construction, make infrastructure improvements [and] develop affordable housing and other projects,” AHCA/NCAL President and CEO Mark Parkinson said at the time.
Maribeth Bersani, chief operating officer of Argentum, told McKnight's Senior Living that the organization believes that the elimination of the medical expense deduction “will have the greatest impact on senior living residents.”
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