Friday, August 9, 2024 by Chad Swiatecki
Central Health's board is preparing to raise taxes: The new property tax rate will be about 10.8 cents per $100 of taxable value, a $66 annual increase for homeowners with a taxable value just over $500,000.
At its Wednesday meeting, the commission approved Central Health leaders publishing the planned new fees in a notice ahead of an Aug. 14 public hearing that would precede approval of the fees.
During the board’s Budget and Finance Committee meeting, also on Wednesday, board members highlighted aggressive spending planned over the next six years to implement the health district’s Healthcare Equity Plan. With expanded specialty services and improved access, the plan calls for the opening and improvement of new facilities and a significant increase in full-time employees.
During the budget presentation, which was shown as background on the tax rates, board members learned that the current reserve fund of about $550 million will decline by about $100 million each year through fiscal year 2030, the longest period that Chief Financial Officer Jeff Knodell is comfortable predicting.
A chart showing the current tax rate and spending pace would leave Central Health with $129.1 million in reserves in fiscal year 2030, which would put it closer to the recommended standard of having cash reserves that can cover 120 to 150 days of operations.
The chart also shows three other scenarios in which tax rates would fall over several years, each of which would result in further declines in reserves or even negative figures.
Patrick Lee, president and CEO of Central Health, said the board and other Central Health leaders need to plan for the future to avoid falling below a “hard deck” of zero reserves. About 90% of the organization's revenue comes from property taxes, so it will need to look at developing new revenue sources, such as payments for patient services, federal health programs, commercial services and philanthropy, Lee said.
At the start of the meeting, the committee was briefed on details of new and planned facilities in the Rosewood Zaragoza and Del Valle communities, which are part of a planned expansion of services to the area's most vulnerable populations. The committee also approved moving forward with an $11 million expansion of the Continuing Education Center.
“Looking at the overall spending cuts and reserve strategy, it's interesting to me that in this gradual rollercoaster of a first half, or an upswing in the rollercoaster, an organization that has budgeted and planned conservatively is also making spending cuts,” said board member Amit Motwani. “It's great to see the same organization taking charge of both phases and executing them successfully.”
Because Central Health's tax rate is much lower than other health districts in the state, board member Shannon Jones suggested the organization's leaders should consider seeking a larger tax increase in the near future as a way to continue providing expanded services across the region.
“Yes, we're probably the only county without a hospital, but the reality is we're also one of the wealthiest counties in the state, and I think the question of whether we can tax our residents' share shouldn't just be some formula, but something that's more reflective of the wealth that supports the population that we're a part of,” he said. “I don't think that's a question that can be answered right now, but I put it up for discussion because Travis County as a whole is getting wealthier and wealthier and our fiscal share, in my view, is not commensurate with that.”
Photo by Larry D. Moore, CC BY 4.0, via Wikimedia Commons.
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