Holy Cross Hospital pushes for mill levy increase

Board cites falling revenues and uncertain future

By John Miller
jmiller@taosnews.com
Posted 11/21/19

Taos County property owners have paid nearly $5 million in mill levy support to Holy Cross Medical Center over the past three and a half years. Next year, they may have to decide whether they are willing to pay significantly more than that to keep the county's only hospital afloat.

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Holy Cross Hospital pushes for mill levy increase

Board cites falling revenues and uncertain future

Posted

Updated Nov. 21 at 3 p.m.

Taos County property owners have paid nearly $5 million in mill levy support to Holy Cross Medical Center over the past three and a half years. Next year, they may have to decide whether they are willing to pay significantly more than that to keep the county's only hospital afloat.

"We need the local funding to continue the quality of care for our community," said Holy Cross Board Chairman Chris Stagg, speaking at Tuesday's county commission meeting (Nov. 19). "We're asking that you let our voters decide this issue."

With the existing 1 mill levy set to expire in June, Stagg and three other hospital board members made their pitch not only for a renewal, but an increase and extension - to 4.25 over the next eight years, the maximum allowable under state law. If approved, that will amount to a significant tax hike for property owners in Taos County who will pay an additional $5.5 million in tax dollars each year over an eight-year period.

If the commission approves the request, voters could see a special election to decide the increase and extension as early as March.

Revenue crunch

While the hospital has stabilized since it experienced a crisis-level cash shortage in early 2018, caused largely by a simultaneous shift to a federal critical access designation and problems with a new accounting software, Stagg said the hospital's future will be uncertain without increased public support.

"The cost of health care is going up and the uncertainty of funding is growing," he said.

Holy Cross is one of several rural hospitals in the state that is seeing its revenues continue to fall year over year. Nationally, 18 rural community hospitals have closed this year, and a total of 161 have closed since 2005, according to the Cecil G. Sheps Center for Health Services Research.

In large part, the financial struggle many rural hospitals are experiencing can be traced back to rising service costs and a payer mix that has shifted toward Medicaid and Medicare, government health insurance programs that cover less than the cost of services provided. In rural areas like Taos, an aging population has worsened that problem. Some hospital administators are also concerned that the recent proposal for "Medicare for all" could accelerate the rise of low-reimbursement government-funded health insurance among the populations they serve.

Stagg said paying competitive salaries to maintain quality staff remains another challenge to the hospital's finances and survival. Board secretary Lucille Gallegos-Jaramillo said emergency room doctors at the hospital haven't seen a pay increase in five years.

Of the 13 other hospitals in the state that receive mill levy support, Holy Cross currently receives the least, under Dr. Dan C. Trigg Memorial Hospital in Tucumcari, which receives 1.5 mills from its taxpayers.

If the commission approves the special election next year and voters pass the mill levy increase, Stagg said about $1.5 million would continue to go toward capital improvements - such as new flooring and new medical equipment. Another $1.5 million would go toward salaries and benefits. A million would go toward creating a "reserve fund," and the final million would go toward supporting other health-related programs in the county, such as the detox center approved for Salazar Road earlier this year.

Taxpayer cost

While Stagg and the board spent much of Tuesday's hourlong presentation citing the hospital's still broad range of services and impressive history of accolades - including a previous five-star rating from the Centers for Medicare and Medicaid Services - they were less prepared to answer the natural question any taxpayer will ask: "How much is this going to cost me?"

When commissioner Gabriel Romero asked the question, Stagg struggled to give an answer.

County Assessor Maria Dimas took to the microphone to illustrate with an example: a county resident who owns a $200,000 home, she said, would be required to pay an estimated $283 in additional taxes each year.

The tax increase would impact even people with fixed rates, she said. Speaking with the Taos News following the county meeting, she said she's concerned that her office will be bombarded with property owners who already struggle to keep their homes off the auction block with their current tax payments.

Commissioners also briefly discussed the idea of an added gross receipts tax instead of the mill levy, the idea being that a sales tax might better distribute the burden of an added tax to include renters and visitors, who not only buy goods and services in town, but also make use of the local hospital.

Commissioner Candyce O'Donnell was also concerned about residents' ability to pay. She asked if anyone had a current statistic for how many people in Taos County live in poverty. According to the U.S. Census Bureau, the most recent estimate is 22 percent, or a little over 7,000 people.

But top brass at Holy Cross say the cost to support the local hospital would be nominal compared to the devastating effect of losing the facility, which employs about 425 people and provides visitors reason to visit and residents a reason to stay.

"Strong communities have good schools, good jobs, good housing - and good health care," Stagg said. "Holy Cross is a key part of our local economy."

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