Tax increase necessary for med school, UT officials say

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A proposed UT medical school and teaching hospital cannot be established without additional revenue from a property tax increase, according to UT officials.

Residents will vote Nov. 6 on whether to fund the proposed school and teaching hospital through an increase in taxes of 5 cents per $100 of assessed property value. Proposition 1 would increase property taxes collected by Central Health, a taxing district that funds health care services for underserved citizens in Travis County, from 7.89 cents to 12.9 cents per $100 of assessed property value. According to the Austin American-Statesman, the average Travis County homeowner would pay an additional $107.40 in property taxes if the proposition passes.

In a memo sent to faculty and staff, Steven Leslie, UT executive vice president and provost, said Proposition 1 would provide $35 million annually for the teaching hospital.

“For us, this is a yes or no proposition,” Leslie said. “Without a complete and reliable source of new funding, we will not be able to start a medical school.”

In May, the UT System Board of Regents pledged $30 million per year for eight years and $25 million per year afterward after the Seton Family of Hospitals made a $250 million preliminary commitment to the hospital. In August, the Austin American-Statesman reported that the school will cost an estimated $4.1 billion over 12 years.

No location or timeline for construction of the medical school and teaching hospital has been set.

Carlos Femat, community relations manager at Central Health, said the tax increase would produce $54 million in annual revenue. He said the federal government will match each dollar of local funding with $1.46 in additional funds. The combination of the tax increase and federal matching funds will create more than $130 million annually.

Proposition 1 aims to provide health care services to underserved and uninsured residents. According to a report compiled by the Hobby Center for the Study of Texas at Rice University, about 23 percent of Travis County residents in 2010 had either no health insurance or were not fully insured.

Don Zimmerman, founder and treasurer of Travis County Taxpayers Union, a political action committee that opposes the increase, said there is no need for a new medical school and teaching hospital because the UT Southwestern Medical Center operates a residency program in Austin at University Medical Center Brackenridge.

“If Travis County really needed the school, they would have already built it,” he said.

Property owners in Bexar County, which includes San Antonio, currently pay 27 cents per $100 of assessed property value to the county’s hospital district. In 2011, property owners in Harris County, which includes Houston, paid 19 cents per $100 of assessed property value to the Harris County Hospital District. Proposition 1 would increase the Travis County property tax rate collected by Central Health to 12.9 cents per $100 of assessed property value.

If voters approve the initiative, the proposed medical school would join six health institutions operated by the UT System in Dallas, Houston, Tyler, San Antonio and Galveston.

Some schools, including the UT Southwestern Medical Center and the UT Health Science Center at Houston, use local hospitals funded primarily by city property taxes.

Printed on Tuesday, October 16, 2012 as: Vote on tax to seal fate for hospital