Wishard Referendum

Marion County voters are being asked to “co-sign a loan” for nearly three quarter of a billion dollars for a new hospital. There is little doubt that the old facilities are worn out; however, there is significant reason to believe that the hospital can’t repay the these bonds over the next 30 years as they claim. If they default on the bonds, the taxpayers will be stuck with the bill. This is a huge tax liability that wouldn’t be subject to property tax caps since it was voted on in a referendum.

The parent company of Wishard, Health and Hospital Corporation of Marion County (HHC), makes a significant profit on nursing homes outside Marion County. It is able to do this by leasing them back to a private operator in order to qualify for additional Medicaid payments (UPL) from the federal government. This arrangement and the additional payments aren’t likely to continue in a post health care reform environment. Mitch Roob, former HHC CEO and currently the state's chief economic development officer called the arrangement “a bit of a scam”. “It does not pass most people's smell test," Roob said. "It is legal, and I will tell you that it is that smell test that will eventually get them in trouble at the federal level".

Without that revenue, the responsibility for repaying the bonds falls on the taxpayers. If the hospital were truly able to finance the bonds out of their own revenue as they claim, then they shouldn’t need the taxpayers to guarantee the bonds. If it is as presented, the project could be financed with revenue bonds with the credit markets determining the creditworthiness of Wishard, not the taxpayers.

Wishard is a teaching hospital for a state school. It is a classroom for IU School of Medicine. Although IU benefits from keeping the hospital in close proximity to the school they refuse to commit their own money or loan guarantees to the deal. If Wishard should be rebuilt because of the value as a teaching hospital then IU should help fund it.

I’m not a rabid “No new taxes” person. However, Marion County taxpayers already bear the burden of a large number of regional facilities. There are some good arguments for a new hospital, but asking Marion County taxpayers assume all of the risk is simply unacceptable given the tax burden that we currently face. High tax rates will force businesses and middle class families alike out of the county.

Additionally, any referendum of this magnitude should make it clear the amount of bond issue, the potential impact on property taxes and that it would not be subject to property tax caps. This referendum mentions none of these things. If a bank were to do something similar it would be considered fraud.

It’s arguable that Wishard should be rebuilt. If so, it must be financed differently.