Voters to decide issue of debt at community hospitals (video)


Amy’s Kitchen will be moving to the closed H.J. Heinz plant in Pocatello.

When voters head to the polls Nov. 2, they will have a chance to restructure the Idaho Constitution.

Earlier this year, the Idaho Legislature passed three resolutions concerning constitutional amendments.  Each resolution focused on a different entity’s ability to take on debt to finance improvement projects.  Voters will decide at the polls if some hospitals, power utilities, and airports can enter into debt.

Wednesday, IdahoReporter.com looks at the pro and con arguments of the debate surrounding hospitals and debt.  Thursday, power utilities will be discussed, followed by a Friday examination of airports and debt.

The amendment

The Idaho secretary of state has issued a voter’s guide showing the full text of the proposed amendment.  Shown here is the full text of the provision:

Shall Section 3C, Article VIII, of the Constitution of the State of Idaho be amended to authorize public hospitals, ancillary to their operations and in furtherance of health care needs in their service areas, to incur indebtedness or liability to purchase, contract, lease or construct or otherwise acquire facilities, equipment, technology and real property for health care operations, provided that no advalorem tax revenues shall be used for such activities?

The history

Prior to 2006, public hospitals were allowed to incur debt as they pleased.  Idaho’s 20 publicly-operated health centers used debt and entered into long-term contracts to enhance care, expand treatment space, purchase expensive medical equipment, and generally improve conditions.

That ability was taken away by the Idaho Supreme Court in 2006, when justices ruled in a case involving the Boise Airport and its desire to build a parking garage for its patrons.  The court said that because the public project wasn’t necessary to remedy an emergency  – a situation provided for in the state’s founding document – the garage needed to gain a two-thirds approval from voters in the area.  Because the hospitals received public funds, they too came under the guidelines of the ruling.

During the 2010 legislative session, Rep. Fred Wood, R-Burley, sponsored House Joint Resolution 4, a measure allowing the proposed resolution to go before voters in November.  Wood argued on the House floor that hospitals needed the flexibility to adapt to situations as needed and that it would be too difficult for them to wait for voter approval in certain dealings.  The measure cleared the House on a 57-12 vote and cleared the Senate by a count of 34-0.

Pro

Several people, groups, and entities have come out in favor of the hospital amendment, including the Idaho Hospital Association (IHA), The Idaho Association of Commerce and Industry, and several newspaper editorial boards, including that of the Idaho Press-Tribune in Nampa.

As part of its efforts to win passage, the IHA has launched a pro-amendment website, entitled “YesonHJR4.com.” The site includes frequently asked questions, lists endorsements, and shows a map of all hospitals affected by the measure.  The IHA says approval “is necessary for hospitals to continue cost efficient improvements to meet the needs of their communities.”

One of the primary arguments against the amendment is that approval would endanger public money.  The IHA site says that’s not possible.  “It [the amendment] is written into the language of the amendment that no additional tax dollars are to be used for projects funded through these financing agreements,” says the site.  “In these cases, where no additional taxpayer moneys are being used to secure or repay the financed project, all risk is put upon the lending institution.”

Here is commercial produced by IHA featured on the site:

In an editorial about the measure, the Idaho Press-Tribune endorsed the plan and said taxpayers will be shielded from bad decisions.  “In this case, taxpayers wouldn’t be left holding the bag in any case because the investors who buy the revenue bonds bear the risk,” said the paper’s editorial board.  “And advocates point out that, among public hospitals, none has failed to meet its bonded indebtedness.” Joe Morris, CEO of Kootenai Health, operator of the Kootenai Medical Center in Coeur d’Alene, testified before the committee hearing that no health center ever missed a payment on debt.

Cons

Not much has come through the media in opposition to the hospital amendment, but there have been at least two vocal opponents of the measure: a government watchdog and a state legislator are urging voters to reject the hospital amendment.

David Frazier, a photographer and blogger, was the man behind the 2006 court challenge of the airport parking garage.  Four years later the political commentator is still opposed to debt-financed public projects without voter approval.

“Public money is public money,” Frazier told the IdahoStatesman. “It’s our money, we the people. Therefore, we have a right to determine how it should be spent in cases of debt.”

Rep. Stephen Hartgen, R-Twin Falls, voted against the allowing the measure to go before voters and he continues his opposition of the idea. Hartgen, in an editorial for the Twin Falls Times-News earlier this month, said approval would take control out of the hands of voters and that hospitals can operate efficiently without taking on debt.

“In the case of the hospital proposal, the need has not been clearly shown. Community hospitals routinely make large purchases now for items such as CAT scanners and MRI machines, and bankers say they are more than willing to loan money for such items based on solid, business-plan principles,” wrote Hartgen.  “Hospitals can also convert to non-profit status if they feel the restrictions are too great, as was done in Twin Falls when the county hospital was taken over by St. Luke’s.”

A simple majority is required for the hospital amendment to win passage on Nov. 2.

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Kootenai Medical Center in Coeur d'Alene, Kootenai Medical Center in Coeur d'Alene
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5 Comments

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