Health departments raise, or try to raise, tax rates to offset state cuts, higher benefit costs and Medicaid payment problems

Some county health departments are trying, and others may try, to increase property-tax rates to make up for Medicaid shortfalls, program cuts and the rising costs of employee benefits so they can continue providing essential public health services for their communities.

Anderson County Health Department Director Tim Wright has proposed a 33 percent rate increase from 3 cents per $100 of assessed property value to 4 cents per $100. The increase would add an estimated $150,000, which Wright says he would use to end employee furloughs and make up for $200,000 that has not been paid by the Kentucky Spirit managed-care company, reports Editor Ben Carlson of The Anderson News.

Many departments have already cut positions and implemented furloughs to compensate for Medicaid shortfalls, state program cuts and employee benefit costs, said Scott Lockard, past president of the Kentucky Public Health Association and director of the Clark County Health Department. Most departments have done everything possible to increase efficiency of the departments' resources, he said.

A recent tax increase in Boyle County will make property owners pay a little more to help fund the county health department. The fiscal court recently voted to raise the county's health tax from 2.4 cents per $100 to 2.5 cents.

As funding streams have changed, departments need additional revenue sources, said Brent Blevins, director of the Boyle County Health Department. Blevins said without the rate increase, the already short-staffed department would have to cut services.

Declining property values during the recession have decreased tax revenue, said Marcia Hodge, director of the Garrard County Health Department. It proposed a tax rate increase from 4 cents to 4.25 cents in September that was estimated to bring in about $21,000, but the fiscal court did not approve it, she said.

Another problem that health departments face, Hodge said, is that they are required to participate in the state's insurance and retirement system. Over the 12 years she has been at the department, retirement contributions have increased from 4 percent to 25 percent, while costs of fringe benefits have more than doubled while salaries have only increased 10 percent, she said.

The Floyd County Health Department increased its tax rate last September for the first time in 20 years, primarily because of increased costs of employee benefits and department funding cuts, said Thursa Sloan, director of the department.

Sloan said she anticipates a big change in the services that health departments provide over the next 10 years.  Primary care will take a much more preventive approach, she said, and health departments will have to pull back in such services and go back to the basics.

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