Millions of Wasted Dollars Hidden by Supervisors’ Creation of Special Taxing Districts
Part 1 of a 3-Part Series
One of the biggest secrets the Maricopa County Board of Supervisors do not want you to know is how they farm off parts of county government that chronically lose money into separate “special taxing districts” where financial losses are all but hidden from the public.
Instead of making these sinkhole areas of county government financially responsible, the Supervisors hide them where taxpayers don’t hear about their losses, allowing them to freely continue their irresponsible spending unaccountable to anyone.
Sure, the County Supervisors brag that they never directly raise your property taxes because they shift responsibility to the special districts to raise your property taxes.
Take for example this little nugget that did not get much attention. Recently, the Special Healthcare District in June voted to raise your property taxes. Did you hear about it? Did you know about it? No because the county’s special taxing districts fly under the radar of the taxpayers and largely aren’t covered by the media.
Over the next three installments, we will examine some of these districts and the millions of taxpayer dollars that are going down the drain.
Maricopa County Special Healthcare District
The Maricopa County Special Healthcare District (MIHS) was created a few years ago by a ballot proposition and consists of a healthcare insurance plan and a couple of hospitals. However, MIHS was largely created because it continues to lose huge amounts of money. The debt was siphoned off into a different district where its losses would go undetected and would not count against the county budget. Once separated, it could have its own property tax separate from the general county budget. This property tax could increase as much as its board deemed necessary because it was no longer accountable to the county.
Let’s take a closer look at the continual losses that MIHS posts, particularly the specialty clinics:
- Dental services lost $538,000 last year.
- Oncology inpatient services lost $1.7 million in 2008, and oncology drug costs lost the district $2.2 million.
- Urgent care, which is not a mandated service, lost $2 million in 2008.
Simply eliminating dental, oncology, urgent care, the FHCs and Complete Care Comfort would have saved the district $8.3 million in 2008.
We also looked at the county medical center and how it handles itself. An overview shows us that the Maricopa County Medical Center accepts any patients for treatment, even if they refuse to pay. An easy cost-cutting measure could be implemented if the district made a decision to turn away patients that refused to pay – which accounts for about 26% of its patients – and send them to other area hospitals that are better able to accommodate for their needs. Yet, the MIHS Directors haven’t made that decision, so Maricopa County taxpayers are stuck paying for their care.
Now, let’s take a look at the MIHS District’s budget for the current year. This year the district’s budget is $27.8 million. However, there is a large problem going unnoticed. You see there is this thing called a balance sheet where income and expenses are measured. On one side, the expense side, we know the number is $27.8 million but on the income side, it is only projected to be $20.8 million with no hope of making it up by the end of the year. Just to hammer home the point, that is showing that the MIHS District will be spending $7 million more than they have.
Does it get any better? No. The 2009-2010 budget is estimated to have an overall $44 million operating loss. The Maricopa County Medical Center is facing decreasing operating revenues and the amount of debt is expected to increase. Despite the fact that the Maricopa County Health Plan is seeing increasing revenues, its expenses are increasing as fast as revenues. I think we can safely predict what the result will be – expenses surpassing revenues and creating more debt. As it stands, the district owes $17 million to the county in debt service reimbursements for loans the county made to the district previously.
The hope that the debt will be cured by federal money is also not a possibility. The district currently receives federal Section 1011 money for treating illegal immigrants, but that is being cut in half, from $5.4 million this year down to 2.7 million next year so either number of those treated needs to decrease or once again expenses will exceed revenues.
In Their Own Words
We tracked down what some have said about the MIHS District and its financial standings but it has left us scratching our heads. See for yourself…
- Last fall the Chairman of the Board, Gerald Cuendet, said that if things kept going the way they were, the property tax could be eliminated. What happened since then?
- The board voted in favor of a tax levy for itself last year. One of the directors, Gail Hendrix, objected to tax levy on the basis that it was a double tax. Gail noted that since people are already taxed by the federal government to provide free healthcare to those who do not pay, why should people be taxed again at the local level? Unfortunately, the CEO of the district and a trustee for the Don Stapley defense fund, Betsey Bayless, convinced the other board members to outvote Hendrix and approve the highest amount possible for the tax levy, 7.8%. By the way, it is important to note here Betsey Bayless is making $350,000 per year and has no medical or healthcare education at all as far as we know.
We are only scratching the surface here but considering how expensive it is running the MIHS district and that costs and taxes continue to increase, does it really make sense for the Maricopa County government to run a healthcare district? Especially since The County Supervisors have made it clear they are not going to provide any oversight, the MIHS District will not provide oversight, and the fact that taxpayers already pay federal taxes to provide for federally mandated healthcare services to indigents. Seems to us that it just doesn’t make fiscal sense to tax property owners again to duplicate what could be done more efficiently in the private sector.
Maricopa voters need to vote those Supervisor’s in favor of Special Taxing Districts out of office. I guess I’m talking about all of them. Our government was set up to elect new people to office every election. Why? To create new prospectives , new ideas and to stop professional politicians (like the house of Lords) or house of Kennedy’s. If we all took the time to vote and look into these kind of scandal’s committed by self serving professional politicians, we would not be paying over 50% of our income to: City, County, State, Federal, Special District taxing. Who’s fault is it? Apathy (you and me), Do something about it.
I shall purpose to address this at an upcoming Tea Party. This may be legal, but it is also dishonest.
We need a “tea party” to initiate an investigation of Maricopa Medical Center, and it’s Health System generally. California got into the habit of raising property taxes whenever there was a spending short fall. The process led directly to Proposition 13, whereby the property owners passed a referendum limiting property taxes.
Maybe we need to do the same.
Prop 13 Arizona will solve the problem. It caps the total tax rate and limits increases to no more than 2% per year.
We are collecting signatures to qualify for the 2010 ballot. Get involved. Join our volunteer team and donate to make sure Prop 13 Arizona succeeds.
Can everyone just imagine this type of thing happening all across America?
couple things U have some facts incorrect;
First not all the board voted to increase the tax rate to the maximum, one did not. And the CEO makes 368 plus
U are using ju of 08 minutes jun of 09 are posted and should be used
And if the Az Gov would send ALL the DSH moneys to the MMC it would not have to use any of the tax monies. Last yr they gave the center 4.2 M and the other hosp 17 mil and swept the rest into the general fund and used it to make and improve roads or what ever.
the 1011 funds were Cut period MMC does not get any this yr thank u BHO.
Some up to date and true facts reference MISHCD.:
Under supervisors The hospital was loosing money hand over fist and County and State picking up the tab.
Since the beginning it was designed to be a safety net hospital, to care for the indigent that could not get care elsewhere and now the Feds have a law that says all hospitals must give emergency care to any one that needs it, Yes, it is true some hospital in Az will refer the Maricopa Medical Center to patients not having money but remember it was designed for that from day one and yes, with the law bringing life into the MMC as a special Health care district the legislature gave it the ability to siphoned off a certain amount of tax monies from the citizens of the County but this is controlled by the law that designed it.
In 03 the supervisors along with our legislature put the Maricopa County Hospital up to the public on a referendum and along with the other hospitals and the Rag and others it passed from being under the control of the Supervisors to being a Special Health Care District sub divided into 5 district.
Each District was to elect a member of the Board of Directors who would then have sole control over the doings of this newly created Heath Care District. They put in as the new CEO Betsey Bayless (Past history Supervisor,Sect of State, Member Az House, even a run for governor. This was in 05. She in turn brought in the present COO,CFO,CMO and a host of others. When they cam on board they had one days funds to operate said Hospital and its 11 clinics and psychic unit. today the hospital is in much better health and has something around 120 days of monies in which to operate if needed, not what it should have but in much better health. I would suggest if someone wants to learn more about the running of said Hospital then go to the formal meetings and ask questions and sit and learn.
I hope this gives some an idea where the District Hospital came from. I believe i represented the facts as I remember them.
Just one more thing: above someone said..”Especially since The County Supervisors have made it clear they are not going to provide any oversight, the MIHS District will not provide oversight, and the fact that taxpayers already pay federal taxes to provide for federally mandated health care services to indigents.”
First: Supervisors have No more control over the District since it was overwhelmingly voted in by the Taxpayers of the County.
Second: Yes true, taxpayers already pay a large amount of taxes to the Hospital and I would add all or almost all hospitals in Az get DSH funds, (Federal money but still tax money)they get Accesses funds (federal funds called Medicaid, but still tax payers money)) and were getting 1011 funds just like the Maricopa Medical Center. I would also suggest you take a tour of the hospital, contact the clerk of the board and get one going go see what we are paying for.
So you see it is not just the MMC that gets tax money its all hospitals and I would add at this time if the MMC were to close, burn down, whatever, the hospitals in Maricopa County could not take care of MM C’s patients (400 plus K per year)
Like it or not there is a definite need for Maricopa Medical Center.
I don’t know If I said it already but …I’m so glad I found this site…Keep up the good work I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say GREAT blog. Thanks, 🙂
A definite great read..Jim Bean