Courtesy photo

Courtesy photo

Health care advocates pursue hospital district for Nov. ballot

Islanders face complex tax scenario

Members of the Vashon-Maury Island Health Collaborative will soon begin circulating a petition to put a hospital district on the ballot this November.

The possibility of creating a hospital district — an entity this community would fund through property taxes to deliver health services — was part of a series of public meetings the collaborative held last fall. Those meetings came after Neighborcare CEO Michael Erikson told islanders that the Sunrise Ridge clinic is operating at a $350,000 annual deficit and requires community financial support. While a hospital district was discussed in those meetings, the collaborative recently announced it is moving ahead with that option after having found no other solutions for creating sustainable health care on the island.

Collaborative members John Jenkel and Tim Johnson said the decision to pursue a hospital district is not about supporting Neighborcare — which may or may not prove to be the best fit for Vashon — but about supporting island health care as a whole.

“We are not in the business of just solving Neighborcare’s funding problems. We are talking about solving the island’s ability to find the best solution that it can, whatever that may be,” Johnson said. “We are not here saying, ‘Save Neighborcare.’ We are here saying, ‘Give the island the ability … to find the best possible fit for the island and make that work.’”

Jenkel, who is a Neighborcare board member, but who was speaking from his perspective as a member of the health collaborative, agreed. He also stated that Vashon is at risk of not having medical services at Sunrise Ridge without a sustainable, dependable source of funding to support those services.

“We have no options if we don’t do this,” he said. “By the end of 2019, I do not think we could count on Neighborcare’s presence, and there literally is no one behind them, and there’s no one at either the state or the county level that feels an obligation to provide for medical services out here.”

Johnson and Jenkel said they have met with several state and county officials as part of this process, and they believe any assistance that might come to Vashon would be far below what is needed to address the expected annual financial shortfalls any provider would face.

State law sets the process for creating a hospital district, Jenkel said. The first public step is the gathering of signatures, which he and Johnson say volunteers will do in small group settings and at public spots on the island. For the measure to be on the November ballot, they plan to gather about 1,000 signatures. The requirement is 10 percent of the total voter turnout in the last general election, which was just short of 8,000 people. They want to have more than the required 10 percent as a buffer for ineligible signatures.

In November, islanders would vote yes or no on the creation of the hospital district itself and for five islanders who would run to serve as volunteer commissioners. Those individuals would need a substantial skill set, Jenkel said, including experience in accounting, management and health care. Their initial terms would vary, from one to six years.

Johnson and Jenkel said they would welcome any qualified person who files to run, but they also plan to focus soon on recruiting individuals to serve.

“We think it is really important to at least get the ball rolling with people who have the sufficient skills that are needed,” Jenkel said. “You can’t just throw the puzzle out there and not have anybody you think is capable or willing to run.”

Also per state law, islanders would not vote on a levy rate to fund the hospital district; the commissioners would set the rate once elected. The law allows commissioners to levy 75 cents per $1,000 of assessed property value, Jenkel said, noting that he believes that a rate of 40 cents per $1,000 of assessed property value — a midpoint figure of what is allowed — is reasonable at this planning stage. That rate would bring in $1.3 million to $1.4 million annually.

Because of the state’s tax laws, creating a hospital district could curtail Vashon Park District’s income. The law states that combined local districts’ tax rates — such as for county, fire, cemetery and parks — cannot exceed $5.90 per $1,000 of assessed property value. If that amount is exceeded, then “prorationing” is implemented and reduces the tax revenue of so-called “junior” taxing districts in a particular order. On Vashon, the taxing district first to be affected would be the park district, followed potentially by the flood district, then the Cemetery District.

Currently, there is 62 cents of head room before prorationing would be required, according to Hazel Gantz, a King County levy specialist. However, islanders and other county residents will be asked to vote this year on several levy increases, including a 4-cent increase for the King County Parks levy, an increase of about 17 cents for the King County Library System, and an 11-cent increase for the Vashon Park District, bringing its rate up to 52 cents. Those increases will have an effect, if passed.

Gantz does not make levy-related predictions about the future, saying there are too many “what-ifs,” but did provide a scenario based on known numbers. She used the current assessed value of island property and assumed the passage of all levy requests and a hospital district rate of 50 cents. The result: The Vashon Park District would lose 20 cents off its rate.

Next year’s figures will be different from this example because of the changing nature of the variables involved, but at the Vashon Park District, Executive Director Elaine Ott-Rocheford said such a sizable decrease would mean the park district commissioners would have to make a series of hard decisions about what to fund. She noted that the Vashon Park District was voter-approved for a 50-cent rate, which has decreased since the last election to 41 cents. The increase islanders will vote on this spring is intended to help the district address long-deferred maintenance.

“We have not had the financial footing to fund the necessary projects that are deteriorating assets,” she said. “That is what the 52 cents is all about.”

She said a substantive loss of revenue for the park district would require commissioners to make hard choices, noting in particular the year-round pool and the $75,000 the park district pays to the school district through their commons agreement.

“It is up to the voters to decide what is the mix of services that are important to the island community,” she said. “It is a question that each and every voter can only answer themselves.”

King County Assessor John Wilson recently addressed the island’s situation.

“You folks are really in an awkward spot, and there is no quick easy fix or win-win situation, and the challenge you have is even if you vote to implement a hospital district, then it will have to be mindful of its effect on other districts,” he said.

He added that there are discussions taking place about taxing capacity, especially for unincorporated areas of large urban counties. That topic will likely not get addressed in this legislative session, he said, but may in the future.

“Unfortunately for Vashon, you are just kind of stuck. There is no immediate tax relief coming soon or a lid lift for the $5.90 limit,” he said.

Both Jenkel and Johnson acknowledged the complexities of the tax situation for islanders — and the many variables that make it impossible to say with certainty what the tax rate would be, what it would cost homeowners and its effect on other taxing districts. Despite those challenges, they said they intend to move ahead, as they believe creating a hospital district is the only answer for providing a sustainable, sufficient and reliable funding source for health care.

“The bottom line is that we will lose most of our medical care if we don’t do something about it,” Johnson said.

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