The highly disputed hospital tax is continuing to pit Republicans and Democrats against each other in the state Capitol, and has become one of the main reasons for the Legislature's failure to pass a budget.

According to Carla Vigue, spokesperson for Democratic Gov. Jim Doyle — who proposed this tax in his version of the 2007-2009 state budget — the tax would be used to bring federal dollars into Wisconsin's health care system.

"Hospital assessment [tax] remains the only tool in the budget to leverage federal funding for hospitals," Vigue said.

The program, Vigue added, requires hospitals to pay for care of lower-income and Medicaid patients. The federal government will then reimburse the states for providing services to people who cannot afford them.

"The hospital would pay an assessment to the state … and we would reimburse the assessment back to the hospitals, plus extra," Vigue said. "Hospitals will still be reimbursed and get a higher rate for helping patients."

Despite remaining in heated negotiations, Vigue said ultimately this tax would increase money allotted to hospitals throughout Wisconsin.

"It is an opportunity to get additional federal funding into the state," Vigue said.

Josh Wescott, spokesperson for Senate Majority Leader Judy Robson, D-Beloit, said hospitals in the state are not currently paid back for funds they use treating poor patients.

"This would be a tool to ease [hospitals'] pain a little bit," Wescott said. "Hospitals wanted this [because] they would end up with a lot more federal money in their back pocket."

Wescott added Democrats pulled the tax from the budget as a white flag aimed at Assembly Republicans, but reintroduced the measure when the Hospital Association voiced its support for the measure.

"We pulled this because it has become one of those lightning-rod sort of issues," Wescott said. "We were trying to move the budget forward."

When the tax was dropped from budget deliberations, Wescott said, the Hospital Association voiced serious concern.

"They had a bunch of hospitals saying, ‘Now we're not going to get our money back,'" Wescott said. "All of a sudden folks at the Hospital Association are calling and saying, ‘Our members wanted this [tax].'"

But many members of the Republican-controlled Assembly continue to voice opposition to the tax.

Michael Boerger, aide for Sen. Michael Ellis, R-Neenah, said hardworking citizens would unfairly be forced to foot the tax's bill.

"It is being paid for by people who are responsible and who have health insurance," Boerger said.

Ellis said in a release Friday the funding scheme used to obtain the promised federal funding is concerning — the dollars promised by the government may not be sustained in the future.

"In two years, this program will only continue to grow as health care costs continue to rise," Ellis said in the release. "After two years, we will have created a huge expectation level that the program will continue and we are promising to cut off the revenues used to pay for it. What will we do then?"

Amid controversy over the hospital tax, Wescott said he remains optimistic about the budget process.

"We made an offer last Thursday. … This has almost become the lynchpin of closing this deal," Wescott said. "A deal is definitely within reach here."