In budget preview, Central Health officials earmark $30M bump in health care delivery costs

The Central Health Board of Managers was shown preliminary budget projections on Aug. 21.

The Central Health Board of Managers was shown preliminary budget projections on Aug. 21.

One month before its budget is officially due for approval, officials at Central Health—Travis County’s health care district—showed they expect to spend tens of millions of dollars more in the upcoming fiscal year on health care services.

The budget, if passed as shown at the Aug. 21 Central Health Board of Managers meeting, represents a 12.07% increase in services costs. In all, Central Health is budgeting $276.9 million in health care delivery costs in the 2019-20 fiscal year, up from the current year’s $247.4 million budget.

“The population in Travis County is growing daily,” said Sherri Greenberg, vice chairperson for the Central Health Board of Managers. “As the number of people who are needing our services [grows] … we are needing to provide additional services … both in the number of people and the types of health situations.”

The largest percentage jump in costs comes in operations and support, health promotions and costs related to Central Health’s Downtown Campus. Central Health is set to budget $46.9 million to those endeavors, a $16.6 million bump.

To support the budget increase, Central Health is considering adopting a tax rate up to 6.9% over the No New Revenue Rate, or the effective tax rate. The effective tax rate is a rate that would generate the same amount of tax revenue if applied to properties taxed in consecutive years, according to the Texas Comptroller of Public Accounts.

While Central Health is set to lower its property tax rate to 10.4984 cents per $100 valuation—down from the 2018-19 fiscal year’s rate of 10.5221 cents per $100 valuation—the health care district will collect more in tax revenue due to rising property appraisal values.

Managers were shown seven-year forecasts for two effective rate increases: 6.3% and 6.9%. After the budget discussion, managers expressed concern over the prospect of lower cash reserves that a 6.3% effective rate forecasted.

“If we go with 6.3% it does weaken us … over time,” board member Charles Bell said. “I’m not sure that with all of the other risks that we would face over the next 3-4 years that would be sufficient to cover us and the issues that we might face.”

Central Health is hosting a community discussion to take feedback from the public on its FY 2019-20 budget at 6:30 p.m. Aug. 26. The meeting will be held at the Central Health board room, located at 1111 E. Cesar Chavez St., Austin.

The board of managers will vote on Central Health’s maximum tax rate Aug. 28 at a special budget meeting. Two public hearings on the budget and tax rate will be held Sept. 11 and Sept. 18 before the Travis County Court of Commissioners votes to approve the Central Health budget Sept. 24. Travis County is slated to approve the Central Health tax rate one week later on Oct. 1.
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