Updated 10/24/2012 07:09 PM
St. David’s announces opposition to proposed health care tax
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St. David’s HealthCare announced Wednesday that after “careful consideration” the private hospital system would not support Central Health Proposition 1 this election.
“We are very supportive of bringing a medical school to Austin,” President and Chief Executive Officer of St. David’s HealthCare David Huffstutler said. “But we do not believe that this is the appropriate way to fund it.”
If passed by voters on the November ballot, Central Health Proposition 1 would tax Travis County property owners 5 cents per $100 valuation in order to fund local health care services and eventually build a medical school. An Austin homeowner with a $200,000 home would see a tax hike of about $100 per year. With the increase, the property tax would raise to 12 cents total per $100 valuation for a grand total of $240 per year on that same home.
The tax hike alone is expected to bring in $54 million dollars per year, but contributions from the federal government will more than double that figure, making the total more than $130 million per year.
Central Health will have a 51 percent stake in the fund, and the Seton Medical Family gets the rest. Saint David's tried to get in on it too, but the deal fell through last week.
Central Health's CEO Patricia Young Brown acknowledges voters may be confused.
"We're not building buildings,” Brown said. “We're not building a teaching hospital. The funds that Central Health receives will be utilized for the direct delivery of care to patients."
The Travis County Taxpayers Union has also opposed the plan and hired attorney Stephen Casey to fight the proposition. According to Casey, health care districts can only provide services for "needy and indigent people." They cannot tax citizens to provide services for the county's entire population.
Huffstutler says Travis County taxpayers are already “carrying the burden for indigent care” for Austin and the surrounding area.
"We feel an obligation to educate the public, inform our stakeholders, about what's really happening here, how it affects them, and the rationale to our opposition to Proposition 1," he said.
City and state leaders, including Mayor Lee Leffingwell and Sen. Kirk Watson, have expressed their support for Prop 1. They say not only will the medical school bring jobs to the area, it will help the future of Austin's health care.
St. David’s announcement comes at the start of early voting. Election Day is Nov. 6.