Florida’s 28 taxpayer-funded hospitals and healthcare taxing districts would be unable to provide some of the medical services they now offer if voters cut property taxes in November, a report issued Thursday says.
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The new report released by Florida Policy Institute, a nonprofit that researches state budgets and policies, looks at the big-picture financial impact on public hospitals if Amendment 3 passes in the general election in November and estimates a $323 million loss over the next three years.
The report shows that Broward Health, the hospital system in the northern half of Broward County, has the most to lose among Florida public hospitals because it relies more heavily on property taxes for revenue. Florida Policy Institute researchers estimate that Broward Health will incur a property tax loss of about $100 million over the next three years. Its total annual revenue is about $2 billion.
South Broward’s Memorial Healthcare System, much less reliant on property tax revenue, would lose $2.2 million in ad valorem income over the next three years, the report shows. Memorial has diversified income streams, including investment income and growing revenue drivers like outpatient pharmacy services.
The Healthcare District of Palm Beach County would lose $66.4 million over three years if Amendment 3 is approved and Jackson Health System in Miami-Dade would lose $63.9 million, according to the report.
While Broward Health, Memorial Healthcare, and Palm Beach County’s Healthcare District receive funding based on a county millage rate, Jackson does not levy property taxes independently through a millage; its funding is determined by Miami-Dade County but would still be impacted by a decrease in property taxes.
“People don’t understand that property taxes are funding public hospitals in Florida, so we want to raise awareness of the impact of Amendment 3 on hospital services,” said Erica Li, a health policy analyst with Florida Policy Institute. “We want Floridians to understand the consequences.”
Florida Policy Institute says that lost revenue for public hospitals would result in reduced access to care, longer wait times, reduced staff availability, and decreased funding for community care and programs serving low-income Floridians. It notes that hospital and heathcare district ad valorem revenue from property taxes is mostly used to fund care for the underinsured and uninsured, also known as indigent care.
“The proposed amendment contains no plans to replace hospital revenue that would be lost as a result of cutting homestead property taxes,” Li notes.
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In November, Florida voters will have the chance to create a pathway to drastically change how local governments are budgeted by increasing the homestead exemption on primary residences from $50,000 currently to $250,000 by 2028. The measure would save Florida homeowners money but result in less revenue for local governments. The proposed Amendment 3 has already raised concerns about a reduction in government services and community programs.
Currently, 28 hospital or healthcare taxing districts in Florida can levy property taxes and, if needed, raise millage rates to fund the operation of their hospitals, clinics, or other special healthcare programs. However, only 13 of them receive some funding from property taxes. Each hospital taxing district is unique in terms of facilities, community served, and programs funded.
Public hospitals in Florida, known as safety nets, provide essential medical care, emergency services, and community health support for low-income, uninsured, and all residents regardless of a patient’s ability to pay.
“This is something we are watching closely,” said Justin Senior, CEO of the Safety Net Hospital Alliance of Florida. “Public hospitals run much tighter margins and even negative margins compared to the rest of the industry. That often is made up by supplementing with tax revenues in exchange for taking on the work that the private sector won’t take on.”
Senior said it would be misleading to call the reduction of property tax revenue a catastrophe.
“Hospitals are going to have to make choices. It would force difficult decisions. It would be more challenging for some more than others,” he said. “There are a lot of strategies you could employ, and I am sure each hospital system would handle it differently and find a way to make up for the loss.”
Li at Florida Policy Institute says the report shows the property tax cuts under Amendment 3 will have repercussions on the health of communities. “Some hospitals will have a tougher time grappling with the loss than others.”
South Florida Sun Sentinel health reporter Cindy Goodman can be reached at [email protected].
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