Passing the Budget Buck

The hospital district gives the county $30 million, it gets a budget back. Good deal.

In a normal world, politicians and public service bureaucrats would be crawling over each other trying to claim ownership of an idea that -- at least for now -- avoids a tax increase and yet delivers expanded governmental goods and services.

Why, then, is there such reluctance among area politicians and bureaucrats to say whose idea it was to have the Harris County Hospital District divert $30 million to Harris County so an expected county tax increase can be dodged? And why is everyone so confused and/or deferential about dispensing credit?

Well, first you have to remember that this is the hospital district budget. Second, it must be noted that this is the Harris County Commissioners Court, which has two members under indictment. And third, taxpayer-supported indigent health care is Commissioner Steve Radack's favorite soapbox topic. (He doesn't have much good to say about it, of course.) So you can forget the "normal world" assumption.

And then there's the unfortunate specter of Metro, which has become a cash cow milked often and well by the city to pay for more police on the streets. Who can blame anyone if Metro comes to mind when a potential budgetary shell game involving the hospital district is suggested? And who can blame hospital district Chief Executive Officer Lois Moore for not wanting to even touch the hospital-district-as-Metro analogy? "I won't comment on that," Moore says when the comparison is suggested. "I'm not going to comment on that. I'm trying to get my budget approved."

Even so, the analogy seems apt. In the city-Metro situation, Metro funds are used to repair city streets, thus allowing the displaced city funds to provide more police -- and thus reducing the funds Metro can use to pay for its own upkeep and improvement. In the proposed county-hospital district situation, the $30 million from the district would go to pay for health care for jail inmates, juveniles and the mentally ill -- health care the county now pays for -- thus freeing up county money to be spent elsewhere, and reducing the need for new taxes. And also thus, perhaps, reducing the monetary cushion that allows the hospital district to deal with unexpected problems.

In early May, when reports first surfaced that the county might be looking to the hospital district for some funding help, the idea was linked by many to Harris County Commissioner Steve Radack, a longtime district watchdog and, this year, the lead voice in suggesting that the hospital district's proposed $473 million budget is excessive and doesn't take advantage of surplus funds of up to $170 million.

Radack's criticism of the hospital district's budget has been linked to his suggestion that the district's tax rate could be rolled back by three cents -- something the district's executives and board of directors feared would jeopardize the district's chances of receiving some $112 million in Medicaid money known as disproportionate share funds. Disproportionate share funds are designed to compensate health care providers who provide a disproportionate amount of care to indigents and illegal aliens. But to make sure the money's spent where it's supposed to be spent and doesn't become a federal-to-local tax transfer, regulations state that if a recipient of these "dispro" funds uses the money to allow for a cut in its local tax support, the recipient may lose the funds altogether. And given that if Radack's effort to roll the district's tax rate back succeeded it would eliminate the need for a county tax increase in the fall, the concern was, it might cost the district millions.

So it's understandable that the twin notions of dipping into the hospital district's surplus and holding off a tax hike would be linked to Radack. Indeed, King Hillier, the hospital district's government relations officer, concluded that Radack was an integral player in the funds-transfer idea and made the mistake of saying just that in a May 5 memo to a state health official: "District administration and Commissioner Radack had an agreement not to roll back the tax rate if the district would provide an approximate $28 to $32 million intergovernmental transfer."

When he found out about the memo, though, Radack went ballistic, phoning Hillier while the district official was vacationing in New Mexico. The "intergovernmental transfer" was not his idea and there never was a deal, Radack insisted (and still insists). Hillier eventually dispatched a letter, part clarification and part apology, to the commissioner.

With Radack refusing credit, the latest assumption has Precinct Four Commissioner Jerry Eversole coming up with the funds-for-taxes trade. This surprises some participants, since the seldom loquacious Eversole is known more for his golfing escapades than for his discourses on indigent health care reform. And Radack's view of Eversole's role in the transfer idea suggests that things aren't crystal clear. When asked about a headline in the suburban 1960 Sun newspaper, "Eversole's Plan Could Prevent County Tax Hike," Radack demurs. Was it Eversole's idea? "Not to my knowledge," he says. "His idea? I saw the article. Ask him."

Eversole, meanwhile, describes the idea of dipping into the hospital district's till as something akin to spontaneous combustion, with Radack as one of the combusters. "I don't know how to answer that question, as to whose idea it was," Eversole says. "It was a combination of a lot of things: the fact that Commissioner Radack made the public aware that there was a surplus of funds at the hospital district [and that] I made the proposal to [district board chairman] Elvin Franklin that some spirit of cooperation needed to be shown between the hospital district and Harris County so that it's not really a war every time we do their budget."

That "spirit of cooperation" evolved into the $30 million offer to the county, which the hospital district board approved in early May -- after, as it happens, Commissioners Court had postponed a vote on the district's budget.

"I'm going to say it was Eversole's idea," is how Franklin responds when asked whose idea the money shift was. But another district board member, who not surprisingly wishes to remain anonymous, isn't quite as charitable. "Well, Jerry Eversole wants to take credit for it," this board member says. "[But] I don't know where he got the idea." Other insiders speculate that since Eversole is up for election in the fall and still faces several indictments concerning his campaign finance record-keeping, compatriots want to funnel something his way that he can brag about to the voters.

But if the paternity of this particular child isn't exactly clear, its adoptive father, Eversole, is clear about what the money will do. "The hospital district's advance," Eversole says, verbally shuffling for a moment, changing "advance" to "loan" and then insisting it's "not a loan" before continuing, "this $30 million, whether it be in cash or whether it be in the form of a three-cent tax cut, will allow Harris County to operate in fiscal year '94'95 without a tax increase."

In other words, the amount is no accident. Each one-cent increase in the county property tax rate raises about $10 million in revenue. If the budget that Commissioners Court passed in March had not been buoyed by the $30 million from the hospital district, county taxpayers (i.e. voters) would be facing a three-cent increase when the tax rate is set this fall.

As for the Metro cash-cow image -- the district's Lois Moore insists that the $30 million tab for the county is a one-time deal. "We have indicated this would be one time only, because we don't have the funding on a regular basis," Moore says. "The [district] board approved it for one year only."

Moore is clearly frustrated by the commissioners' opposition to the hospital district's budget. This is the third year in a row the district budget has required no tax increase, yet she still hears nothing but static from Radack about surplus funds and excessive spending.

"The most frustrating part is to have accomplished all this and to have this difficulty in having a budget approved," Moore says. "I don't understand it."

Radack is unmoved. The Precinct Three commissioner thinks if the district has a surplus of money, it should be spent on either providing services or rolling back the tax rate. "There's no reason to pre-plan by taking people's money early," Radack says of the idea that the district has to brace for the future. And he doesn't buy the Metro analogy.

"The difference is, over at Metro they had a pot of money and the city said, 'We want a part of that pot.' I'm not trying to take away [the district's] pot of money," he says. "I don't think we legally can. I'm not going to try. If they want to start giving us money, to pay for things they should have paid for anyway, like health care for prisoners, that's one thing. But like I said from the beginning, I want to cut their tax. That's totally different."

And Radack continues to insist that the county's receiving $30 million from the district wasn't his idea. Which may be fair enough, but which obscures the fact that his criticism of the district likely led to the offer. And even if it had been only an idea he floated to see if anyone hopped aboard, it's understandable that he wouldn't now point to it as a panacea. The district's giving up $30 million to cover some expenses for the county isn't what Radack is after; he wants the hospital district's tax rate lowered for keeps. And a one-time payoff to keep the county wolf from the district door won't satisfy him. But taking $30 million from the district and telling taxpayers there won't be a tax increase this year -- well, it's not a bad hand for the commissioners to be dealt.

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