County Commissioners Considering 7.9% Property Tax Hike For County Hospital

The county hospital’s budget is in critical condition: University Medical Center is facing a $28 million shortfall according to administrators.

Wednesday afternoon, county commissioners met with UMC administrators and members of the El Paso County Hospital District board to discuss a proposal that would alleviate some of UMC’s budget woes by raising property taxes throughout the county.

UMC CEO Jim Valenti said it will be an especially difficult fiscal year for the county hospital. He said they will already be about $6 million in the hole due to an increase in “charity care” patients, or patients that cannot afford to pay for the services UMC gives them. Valenti said $22 million in cuts from state lawmakers are making their financial situation even more dire.

However, some are not convinced a countywide tax increase is the best way to nurse UMC’s finances back to health.

“It’s always the taxpayer that gets hit in the head and that’s me!” said Salvador Gomez, a homeowner who spoke out during the public comment part of Wednesday’s meeting. “We can’t afford it. We’re already getting pinched and that pinch is starting to turn into a serious wound.”

UMC administrators are calling for a 7.9 percent increase in property taxes. According to a UMC spokeswoman, that amounts to $12.84 cents extra per year on an average-price $125,000 home.

Commissioners will get the final say on whether to approve the proposal, but first they want to hear from UMC about what kind of financial sacrifices the hospital plans on making before asking taxpayers to pony up the difference.

“Give me either a good explanation as to why I should support this or I’m not going to vote for a tax increase,” said Commissioner Dan Haggerty.

UMC administrators said they would go through thier budget again to specify in greater detail what programs and services could disappear if the tax increase does not go through.

“We’ve been frugal,” said Valenti. He added staff reductions are not feasable since UMC is consistently growing. “(In the past) we couldn’t grow, patients could not get into the hospital, there were long wait times. No one wants to go back to those levels,” said Valenti.

However, critics say UMC could do a better job of tightening its budget by being tougher on low-income patients that pay little to nothing for the treatments they receive.

“You know who ends up paying for that?” asked Gomez during public comment. “Guys like me end up paying for that!”

Valenti said UMC is looking for ways to improve its collection strategy.

Even if the tax hike is approved, the hospital is not out of the woods. The tax increase would only generate about $4 million, which means $24 million in losses would remain. A UMC spokesowman said the hospital will tap into its reserve funds to make up the difference.

UMC’s reserve fund has about $100 million. The hospital spokeswoman said UMC fears digging too deeply into its “rainy day” fund because doing that could negatively impact UMC’s bond rating. She added UMC is already planning on using more of those reserve funds to operate its newest building.

County commissioners will meet with hospital administrators again before putting the tax increase proposal on the agenda. They will vote on it sometime before October. Stay with ABC-7 for the latest.