The big picture
Commissioners approved a 9.3% tax rate increase for Central Health—the Travis County taxpayer-funded hospital district—for fiscal year 2025-26 at $0.118023 per $100 valuation. For a home valued at about $515,213, the average homeowner will pay roughly $608 in property taxes to Central Health, up from $544 last year.
Central Health documents outlined several “patient-first” priorities for the coming year:
- Reduce appointment wait times to under two weeks
- Curb avoidable hospital readmissions and emergency room visits
- Expand health insurance coverage for more patients
- Close gaps in care
The proposed budget includes notable increases in funding for both primary and specialty services.
In the proposed budget for fiscal year 2025-26, the biggest jump in spending is for primary care services, which would rise from about $74 million to just over $103 million, with most of that money going toward an expanded partnership with CommUnityCare Health Centers.
CommUnityCare largely handles primary care services, while Central Health has remained focused on expanding specialty care.
Another major increase is for behavioral health specialty care, which would grow from about $25.7 million to more than $40 million. That reflects additional funding for Integral Care, a mental and behavioral health services provider.
Beyond those two areas, most of the budgeted direct health care services will see smaller, steady increases. Central Health is in a phase of strengthening and fine-tuning its specialty practices, while also working to hire more in-demand specialists to improve access for patients, staff told commissioners.
Finally, the budget also sets aside significant new funding for diagnostic services.
“We can really create a comprehensive one-stop-shop for our patients whenever they're seeking care in our environments,” said John Morgan, Central Health chief operating officer.
Some context
Last year's budget also saw an increase of the Central Health property tax rate of 6.5%, with a similar estimated dollar amount increase.
Approximately 90% of the hospital district’s funding comes from property taxes, and in order to expand services, the tax rate needs to increase, according to Central Health officials.
The district has increasingly shifted toward delivering more direct clinical services, especially since a 2019 change in state law. That shift was formalized in its seven-year, $700 million Healthcare Equity Plan launched in 2022.
The organization has increased its low-income health care coverage six-fold in the last three years, according to Central Health President and CEO Dr. Pat Lee said.
“I think it's important for the community to understand the extent to which Central Health is truly stepping up and providing access to health care for people who otherwise couldn't afford it, particularly as federal funding has been cut," Commissioner Brigid Shea said. "The growth we've seen from about 47,000 patients [Medical Access Program members, or MAP members] in 2018 to more than 135,000 last year, that's remarkable growth."
Additionally, the budget includes millions of dollars in investments towards partner health organizations reflecting the hospital district’s efforts to close the gaps in the delivery of services as federal funding cuts widely impact local health organizations.
"Despite state and federal uncertainty and national headwinds, we are making bold, value-driven choices with our largest-ever investment in CommUnityCare—protecting access while other Federally Qualified Health Centers nationwide face cuts,” Lee said.
Under the new regulations, premium tax credits for affordable health care plans are set to expire at the end of the year.
With these expected funding changes, Central Health is gearing up to provide coverage for more low-income patients, with a goal of increasing its MAP members by 5%, according to county documents.
Put in perspective
Central Health makes up a little over 5% of the total property tax bill for Travis County residents. Typically, the local school district and city property tax make up the majority of a homeowner's property tax bill.
During last year’s budget cycle, county officials impressed upon Central Health leadership the need for greater transparency, calling out the annual $35 million financial arrangement with Dell Medical School at The University of Texas at Austin.
A third-party performance audit of Central Health conducted in late 2024 highlighted issues with documentation and inconsistent reporting methods between the multiagency health care system.
Since 2014, Dell Med has received $35 million of taxpayer dollars annually paid by Central Health with the intent to improve local health care delivery and support medical education, health services and community health programs.
Much of the concern arose from the lack of concrete metrics on the number of patients served. However, Dell Med physicians provide care not only at the UT Health Austin clinic but also at numerous clinics across the metro area, according to a spokesperson for Dell Med.
When these doctors deliver care at locations outside the UT system, Dell Med does not bill for those services and, therefore, cannot track them. However, based on provider surveys, 1.5 million hours of clinical care has been provided by Dell Med physicians locally, serving over 29,000 patients in 2024.
The two health care providers have collaborated closely in recent months to clarify how the funding is being utilized.
Dell Med primarily uses the funds to support staff salaries and operational costs, which is one of the authorized uses under the original 2014 voter-approved agreement—which outlines improved health care for all Travis County residents.
Since 2014, the medical school has recruited 560 new physicians to Austin, with Central Health directly benefiting by hiring 19 specialty doctors from the program in recent years.
The program aims to coordinate patient care across traditionally siloed public and private entities, both clinical and nonclinical providers, according to a May 22 news release from Central Health.
The initiative started with Dell Medical and Central Health. Partners now include:
- Austin Public Health
- Integral Care
- Travis County Sheriff’s Office
- Other major health systems and health plans
Dell Med also regularly shares detailed performance and financial information with Central Health staff and board members.
