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Central Health board votes to put tax increase on the ballot

Thursday, August 16, 2012 by Elizabeth Pagano

The Central Health Board of Managers voted unanimously on Wednesday to seek approval at the ballot box for a property tax hike.

 

Since the Travis County health district was established in 2004, the organization has only raised its tax rate a fraction of a cent. Wednesday night’s decision asks voters to approve a five-cent increase that, if approved, would make the new tax rate 12.89 cents per $100 of property valuation.

 

Central Health Chief Financial Officer John Stephens told In Fact Daily that this will be an increase of about $107 annually for the average-priced Austin household.

 

In what may be the only rally in support of a tax hike we’ll see this year, state Sen. Kirk Watson  (D-Austin) joined representatives from the Downtown Austin Alliance, Texas Exes, the Travis County Medical Society, the Lance Armstrong Foundation and the Greater Austin Hispanic Chamber of Commerce to support of the tax increase.

 

Among other items, the tax bump could help fund a medical school at the University of Texas. Proponents argue that the new facility would create jobs, increase the number of doctors and improve access to health care for those uninsured.

 

A portion of the school may also be funded through what are known as Medicaid 1115 waivers. That program, designed to return a portion of U.S. funding lost when states commit all of their Medicaid programs to a managed-care system, will bring back about $1.40 in federal funds for every $1 that a local health care district spends on programs that transform health care delivery. Local officials hope that the addition of a medical school, and the services it would provide, would qualify as a transformative program, and return millions while helping fund the school.

 

Seton Healthcare Family, which runs the University Medical Center Brackenridge facility, and the University of Texas have each pledged millions of dollars for the project. Seton has committed $250 million to build a new teaching hospital. UT has signed up for a $30 million annual operational contribution.

 

Central Health officials anticipate increased revenue of between $54 and $56 million from a tax increase. They hope to transform this money into about $200 million through the 1115 waiver. Approval for the waivers could come as early as December.

 

Central Health officials were enthusiastic in their support for placing the measure on the Nov. 6 ballot. “We’ve had a very deliberate strategy to build on the systems that were in existence, waiting for the opportunity where we could transform the system into a much more efficient, comprehensive and quality system that we all had hoped for,” said Central Health President and Chief Executive Officer Patricia Young. “This is the time now.”

 

However, consumer advocate Paul Robbins told the board that he had deep concerns. Robbins noted that the only public hearing on the proposed tax increase was held on the same night as their vote. He also questioned the direct subsidization of a state medical school by the city, calling it a “bewildering precedent.”

 

“Unless you can explain how this is going to benefit the poor, I cannot vote for the proposal,” said Robbins. “This appears less about affordable health care and more about creating another economic development engine to propel Austin’s growth.”

 

Board Vice Chair Frank Rodriguez said that while he would vote to put the item on the ballot, he wanted a conversation about how the money raised via tax increase and theoretical 1115 waiver would be spent.

 

“I think we need to have that conversation with the community,” said Rodriguez. “My perspective is that any and all arrangements between Seton, UT and other parties will need to be openly discussed before the election, as these arrangements will indeed require parts of the five-cent tax increase along with federal funding sources and the public needs to know where the money is going.”

 

“I’m going to be pushing for Central Health to have voter forums where this information is presented in an objective way, and a neutral way,” said Rodriguez. “I don’t want this to be a low-information election.”

 

The complete local tax picture remains unclear. Austin City Council on Wednesday voted on first reading to ask voters to approve a $385 million bond issue. While the package would not require a tax increase, the Council still must finalize the bond issue on two more readings.

 

Travis County, which also is in the midst of its budgeting process, has tentatively agreed to raise property taxes to support a 5 percent increase in county spending in the new fiscal year starting Oct. 1. The tax bill of county property owners would rise 1.45 cents to 49.79 cents per $100 in assessed value. That’s an increase of $18 to $1,079 for the owner of a home valued at an average appraised value of $270,677. (This figure that excludes any bond money that would go towards a new downtown courthouse, the details of which are still being worked out.) The Austin Independent School District’s plans remain up-in-the-air.

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