Half-cent sales tax would cover indigent health care

EAST COUNTY — Ed Hunzeker’s ninth-floor office, where he crafts next year’s budget, provides a wide view through open glass windows of a county he sees with a crumbling infrastructure and an aged revenue model.

As Hunzeker, Manatee County’s administrator, watches the county’s $40 million funding source for indigent health care run dry, he sees it as a bigger opportunity to redefine the county’s revenue base by decreasing the burden on property owners and promoting business development.

On June 18, Manatee County residents can vote on a half-cent sales tax increase to pay for, on its surface, indigent health care, which for years was paid for through a health trust fund filled with money from the 1984 sale of what is now Manatee Memorial Hospital.

That account, from which the county pays $9 million a year as the payer of last resort for the uninsured and/or poor, will run out by 2015, county officials say.

The county spends another $14 million in property-tax revenues to pay for community health care, for a total of $23 million per year.

The revenue from the sales tax increase, a measure Hunzeker estimates would add less than $50 a year to the amount an average family pays in sales taxes, will show itself in other areas on next year’s budget.

Using a plan he calls 26/13, a hypothetical look at how the revenue from the sales-tax revenue would affect 2012 property taxes using this year’s budget as a model, Hunzeker sets to change the course.

The 2013-14 budget, which Hunzeker will present to commissioners May 30, will fulfill three promises: raises for county employees; non-reduction of services; and lower property taxes, Hunzeker says.

Hunzeker is selling the half-cent sales tax increase in a package with the lower property taxes, although state law says a promise for lower property taxes cannot be stated explicitly on the ballot.

Hunzeker says property taxes could be reduced by about $65 a year per for a typical home with a taxable value of $150,000.

Hunzeker’s plan also calls for changing how residents pay for municipal police service.

In the 26/13 plan, looking at this year’s budget and keeping expenses the same while accounting for added revenues from the sales tax, $28 million of the Manatee County Sheriff’s Office patrol costs shift from city residents who already pay for a municipal police service. The plan asks unincorporated owners to pay for the service entirely through taxes on unincorporated properties.

Utility franchise fees, which require utility providers to reimburse the county for the public’s right of way, would offset that hit for unincorporated property owners.

Most of Manatee’s six cities already charge franchise fees.

In total and based on this year’s budget, the 26/13 plan would decrease property taxes by 26% for city residents and 13% for owners in unincorporated areas.

The county expects tourists or visitors to pay up to one-third of the sales-tax increase.

Hunzeker says the end result is a fairer distribution of taxes and a diversified revenue stream.

“We become more economically competitive, and we fix the sheriff’s funding,” Hunzeker said. “And, you fix the health care.”

Commissioners have to approve any change to the millage rate, and Hunzeker is betting the group stays true to its conservative form and avoids increasing millage rates, as it did last year.

The federal Affordable Care Act, a reform of the U.S. health-care system designed to insure 37 million uninsured Americans, hangs over it all. The act is set to go into total effect in January 2014.

Gov. Rick Scott’s administration already decided not create a health-insurance exchange under the law, leaving the responsibility to the federal government, and it appears the state will not expand Medicaid as part of the law.

“Nobody likes a tax, but the half-cent sales tax is so small that everybody who pays for something will pay a little, and if everybody pays a little nobody pays a lot,” Hunzeker said.

Contact Josh Siegel at [email protected].

How it would work:
essentials
• The half-cent sales tax increase would only be collected on the first $5,000 of a taxable purchase.
• The sales-tax increase would begin Jan. 1, 2014, and continue for 10 years.
• The tax will pay for indigent health care — a $23 million per year expense paid for by a soon-to-be depleted health trust fund and by property tax revenue.
• Eligible patients for indigent health care are those who have been deemed indigent by the county (at 135% of the federal poverty level or those ineligible for other state or federal insurance programs).
• Patients must prove they live in Manatee County.
• The sales tax revenue can only be used for health care.
• Care would follow a continuum-of-care model, meaning the county and hospitals cannot cap the amount of care a resident receives.

Manatee County’s 26/13 plan for property tax reduction
The following is how revenue from the half-cent sales tax increase would have affected property taxes for this year, holding expenses constant.