Why I support Central Health Prop. 1

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Because I support the goal of improving health outcomes for the uninsured and underinsured, a population increasingly neglected by our state government, I support the Travis County Healthcare District’s (Central Health) referendum for a five-cent increase on its property tax. The resulting overall tax rate of 12.9 cents will still be the lowest tax rate for a hospital district in Texas.  And, the revenue generated will be dedicated to our community’s goal of improved health.

Sure, paying for health care with property taxes is painfully regressive.  But, that is the only revenue source the State provides to hospital districts. To its credit, Central Health proposes to leverage those property tax dollars in two ways.  First, it has developed agreements with the University of Texas (UT) and the Seton Healthcare Family to increase and improve service through a medical school and teaching hospital on the reasonable assumption that these efforts will increase medical personnel willing to work on the health maintenance of the uninsured and underinsured.  Second, Central Health has developed agreements with local health providers to draw down federal matching funds in the performance-based Medicaid Reform known as the 1115 Waiver.

If the goal is economic development, the tax increase and leveraging also meet their mark.  Although providing basic health maintenance should be more health creation than wealth creation, I will apply my economic development analysis to it.  When analyzing the use of taxes to subsidize private sector enterprises, I ask:

  1. Is there a direct public benefit resulting from the activity of the enterprise;
  2. Is the benefit measurable as a condition of the tax subsidy; and
  3. Would the benefit be produced by the private sector without public subsidy?

Two of the enterprises being subsidized are public and one is a private nonprofit engaged in activities that are directly beneficial to the public.  The benefits and the costs of achieving them are measurable.  And, history demonstrates the likelihood of the private sector producing the same or better public benefit without subsidy is improbable.

The agreements Central Health has negotiated are not perfect.  St. David’s HealthCare and other health care providers feel excluded from the discussions on the medical school and teaching hospital.  And, considerable uncertainty remains about the governance structure that will distribute the 1115 Waiver funds. But, I trust the excellent Central Health Board and the process that it has set in motion.  I trust that, as a condition of access to the local property taxes and the federal tax match, the local agreements and the federal Medicaid reforms will require and achieve improved health outcomes for a larger percentage of our community.  That’s worth investing five cents.

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