Sales-tax vote brings ramifications

EAST COUNTY — Since tax class at St. Louis University 45 years ago, Ed Hunzeker has bet on himself.
Hunzeker, Manatee County’s administrator, has always liked numbers and believed in his ability to manipulate them.

On May 31, Hunzeker unveiled a $517.18 million 2014 fiscal year county budget that calls for property-tax rates to be lowered 25% for incorporated residents and 13% for property owners in unincorporated areas.
Those rates are modeled after Hunzeker’s 26/13 plan, a hypothetical look at how the revenue from a half-cent sales-tax increase to pay for indigent health care — set for vote in a special election June 18 — would affect 2012 property taxes using this year’s budget as a model.

The plan — and the budget — surmises Manatee voters and Manatee County commissioners will bet on Hunzeker.

To gain property-tax relief, homeowners first must vote to raise the county sales tax from 6.5% to 7% to replenish a $40 million funding source for indigent health care.

And, even then, if the sales-tax increase passes, commissioners must agree to lower the county millage rate in a September vote.

So, what happens if the first leg of the plan breaks? What if voters say no? What if the bet fails?
In part III of a series, the East County Observer looks at contingency plans.

A plateful of options
Manatee County currently spends $23 million annually on community health care, including $14 million from property-tax revenues. Manatee pays $9 million as the payer-of-last-resort for the uninsured and poor from a trust fund set to run out by 2015.

State and federal law only require local governments to contribute money for certain fees, such as Medicaid Match and for county prisoners.

In 2012, according to county documents, the county paid $4,965,976 for Medicaid Match and $5,423,005 for the Prison Health Services account.

Other health-care funds the county contributes toward include money for mental-health services and some hospital administrative costs.

“We could have told the hospitals, ‘You’re on your own,’” Hunzeker said. “We would have a whole bunch of money in the bank, but the role of government is to meet the needs of the community.”

Most uncompensated care hospitals provide does not go to the poor covered by Medicaid.

Those without any method to pay are often blue-collar workers, working two to three jobs that don’t provide insurance, and who earn too much to qualify for Medicaid.

Kevin DiLallo, CEO of Manatee Healthcare System, says the county gave $6.9 million to Manatee Memorial Hospital last year to cover $8.5 million in emergency room care for those uninsured indigent patients not covered by Medicaid.

DiLallo’s hospitals, which also include Lakewood Ranch Medical Center, pay more than $2 million annually in property taxes.

DiLallo says his hospitals will suffer if the county can’t compensate him for care.

“Like any business that loses revenue, you have to make tough business decisions,” DiLallo said. “I’m just not sure what those decisions would be yet. The care we would get from the sales-tax increase would save a lot of problems.”

It all leaves many options for county commissioners.

Hunzeker says if the vote fails, he recommends the millage rate for 2014 stays the same — 6.2993 for city owners and 6.9102 for unincorporated owners.

Although the rate stays the same, property values won’t.

Preliminary data from the Manatee County Property Appraiser’s Office indicates local property values for fiscal year 2014 will grow 3%.

Commissioners can also let the indigent health-care fund expire and still reduce property taxes.

Hunzeker recommends the other parts of his plan to diversify revenues should also stay if the sales-tax increase fails.

Those changes, which appear on his budget, include shifting $28 million of the Manatee County Sheriff’s Office patrol costs away from city residents who pay for a municipal police service and the installation of utility franchise fees, which require utility providers to reimburse the county for the public’s right of way.
Hunzeker’s budget doesn’t cut any services.

But, for a county still operating under austerity and reaching into reserves, Hunzeker didn’t make that promise for future years, if he can’t make up the $9 million annually from the indigent health-care fund.

“The budget process I use surgically removes things to minimize impact on the community,” Hunzeker said. “But, I think the surgery is about to take not fat, but bone, and it’s going to hurt.”

Hunzeker said he doesn’t want to leave the county out to dry.

“The board has said it won’t walk away from commitment it has to the well-being of community,” Hunzeker said. “How (commissioners) interpret that and what they would do about it remains to be seen.”

Contact Josh Siegel at [email protected].

WHAT IF?
The impact of the federal Affordable Care Act, a reform of the U.S. health-care system designed to insure 37 million uninsured Americans, is still largely unknown.

Gov. Rick Scott’s administration already has decided not to create a health-insurance exchange under the law, leaving the responsibility to the federal government. It appears the state will not expand Medicaid as part of the law. But, if things change and the federal government provides more money for community health care, Ed Hunzeker, Manatee County administrator, says the county would have to respond.

If the half-percent sales-tax increase to fund indigent health care, up for vote June 18 in Manatee, passes, Hunzeker said commissioners could vote to stop the tax after it would go into effect Jan. 1.

“If the feds come and solve our problem, why wouldn’t we stop collecting the sales tax?” Hunzeker said. “Why would we keep putting money in the bank if we didn’t have anywhere to spend it?”