Manatee County Commission Votes to Put Indigent Care Sales Tax on Special June Ballot

BRADENTON – Despite strong public opposition, Manatee County Commissioners voted 4-3 to hold a referendum on a special June 18 ballot on whether to increase the local sales tax by ½ percent to fund indigent care programs that are currently funded by a declining corpus from the proceeds of the county's sale of Manatee Memorial Hospital that is expected to be depleted by 2015.

The plan, which was presented by Manatee County Administrator Ed Hunzeker, county staff and the Manatee Health Care Alliance at a workshop last week calls for a half-cent sales tax that would be used exclusively to fund indigent care (which the county defines as 200 percent of the federal poverty level), while lowering the ad valorem property tax.

Manatee Memorial Hospital had originally been owned by the county, but was sold in 1984 to a private not-for-profit hospital. The county agreed to reimburse the hospital for eligible services to qualified individuals, and when the hospital was subsequently sold to a for-profit hospital corporation, that agreement remained intact.

State law requires that the proceeds of the sale and any interest be used for the health care of Manatee residents who are medically indigent, and the health care needs of the residents of Manatee County as determined by the Board of County Commissioners.

The corpus paid 75 percent of its interest to Manatee Memorial Hospital and physicians to treat those patients, though from 1990-2000 it returned 5 percent back to the corpus. The remaining 25 percent of the interest was paid to the Health Care Trust Fund for various community health-related purposes such as construction and renovation projects at the Health Department, Manatee Glens and Rural Health Services.

At another point, 10 percent of the 75 percent interest was made available to the Health Department to provide outpatient primary care and obstetrical care. These funds were later subcontracted by the Health Department to Rural Health Services, and later received directly by Rural Health via contract with Manatee County.

In 2008, the county expanded the use of funds and consolidated the proceeds from the hospital and other trust funds in the Manatee County Health Care Fund. Blake Medical Center and Lakewood Ranch Memorial Hospital were also included in indigent care programs as part of the expansion. In 2011, the county further transitioned to a hospital grant application process. With the expansion of programs and rising reimbursement costs, the fund is now forecast to be completely depleted by 2015.

Hunzeker described the sales tax plan as a "cost shift" that "diversified revenues," while shifting burdens away from property owners and spreading it to "other residents," while also collecting funding from tourists. The administrator said they would simply be "trading out revenue sources in order to reduce property taxes." He contended that should a "white knight" arrive on the scene in the meantime, in the form of a state or federal solution, it would take only one action from the board instructing the county attorney to remove the tax. Hunzeker argued that having an August ballot to coincide with primaries would be too late, as it was after the July date to set the ad valorem rate for next year. 

The primary concern for residents was the rushed nature of the proposal. Many felt that the information, which was only made public last week, lacked specificity and did not include enough measures for accountability, a concern echoed by many of the commissioners.

Commissioners Bustle and Whitmore showed strong support from the outset, making several comments about not “kicking the can down the road.” They reminded fellow commissioners they were not voting on the tax, but simply voting to put it on the ballot in order for citizens to decide.

Bustle acknowledged that timing was the key, but argued that if it wasn't done, it would be too big of a gamble. The commission chair said, “Fortune favors the bold. Let's go for it … Are you willing to gamble that something is going to come forward from Obamacare? … I don't understand what the reluctance is when you can back out of this … If the economy doesn't recover, if Obamacare isn't implemented, in 2015 we're going to have to figure out how to come up with $15 million in the budget.”

Commissioners Betsy Benac and Vanessa Baugh, two of the most vocal skeptics at the initial presentation, agreed that there was an issue which needed to be addressed. However, both commissioners felt that moving forward ahead of the full implementation of the Affordable Care Act would be irresponsible.

“Some of you are saying, 'it isn't up to us',” said Benac. “'All we have to do is put it on the ballot.'” She said that it came down to “When should we have it on the ballot? When do we feel comfortable that we have enough information for voters to make an informed decision.”

Commissioner Benac also noted that as she understood it, an additional sales tax could only be used for health care or infrastructure. The commissioner said there was a $75 million shortfall in the transportation fund saying, “We have other real needs that we may have to use that half-cent sales tax for.”

Commissioner Gallen also conceded that there was a problem that would need to be addressed, but also expressed deep reservations about the timing. “There's a hole that we need to fill, and we're going to need to decide what kind of program we implement and whether it's one with accountability,” said Gallen. “When I look at the information that's been presented, I don't see that here. There's a precedent for the county taking care of our indigent, and I think it's clear that we're going to continue to do that, but I think we need to take more time and have more community involvement.”

Commissioner DiSabatino echoed Gallen. “We have a caring and compassionate community. I don't think anyone's disputing that we have a problem and we need to do something, but I just got this packet of information of Friday … We need to have more citizen input and weigh-in. The seven of us just received this information, and I think it's appropriate that we have more meetings and compile more information, and it should be on next year's ballot.”

DiSabatino complained that too many issued had been rushed to a vote as of late, and noted that no one had even been able to say what a special election would cost, suggesting that it would be at least $200,000 and possibly much more. She said that if the county was going to spend that money on something that they might repeal in November, she would rather see that funding go to one of the programs they were talking about, such as the One-Stop Center.

Commissioner Chappie shared some of the concerns, but ultimately felt that the bigger risk was in not having the sales tax funding available before they needed it. “We have to find a way to fund what we're already doing,” said Chappie. “We know we're going to have a shortfall of $9 million when the corpus runs out, and we need time to collect that money. The question here is timing. I do believe a sales tax is a lot more equitable and spread out.”

After just under five hours of public comment and commissioner debate, a motion to deny the item was made by Commissioner DiSabatino and seconded by Benac, but while Commissioner Baugh joined them, Commissioner Gallen voted nay, after being unable to get a vote on postponing the referendum until November (Commissioner Baugh had originally seconded the motion, but withdrew her second before a vote was called). Gallen then motioned to approve the item, seconded by Commissioner Bustle, and the two were joined by commissioners Chappie and Whitmore. The motion passed 4-3, with Benac, DiSabatino and Baugh dissenting. Manatee County voters will now go to the polls in just three months to decide whether or not to implement the half-cent sales tax to fund indigent care programs.