Prop. 480 is a $935 million blank check

The Arizona Republic
Monday, October 13, 2014
Kevin McCarthy

In Proposition 480, Maricopa County voters are being asked to approve the third-largest bond/tax increase in Arizona history.

The county hospital proposes to sell $935 million in bonds that will be paid back through higher property taxes. Including interest, this staggering request will cost property taxes a whopping $1.6 billion over the next 27 years.
To make matters considerably worse, Prop. 480 proposes to spend hundreds of millions of dollars to provide health-care services that taxpayers are already funding through federal and state taxes. While there certainly was a time, before the creation of the state's AHCCCS program, when the "county hospital" was where the poor and uninsured received health care, those days have long since passed.

Our nation and state are making enormous investments to ensure that all citizens have access to health insurance and preventative care. Since January, 300,000 Arizonans have been added to the Arizona Health Care Cost Containment System, the state's Medicaid program. Nearly 1.6 million Arizonans (25 percent of the population) have insurance through AHCCCS, which they can use at a variety of facilities around the state.

The uninsured population is small and is decreasing. Maybe the best evidence of the declining role of the county hospital is that this massive bond request actually calls for a huge reduction in the number of patient beds (from 515 to 250) at the new hospital.

Proponents had nearly two years to work with stakeholders to craft a solution that involved private health-care providers, taxpayer groups and the business community. It has the support from none of these groups. It is rather telling that the CEOs of the four largest private health systems in the Valley publicly questioned the wisdom of Prop. 480 in this newspaper.

In particular, these CEOs argued that the county hospital should first be looking to maximize public-private partnerships that use the region's excess hospital beds. At a minimum, taxpayers deserve the benefit of such options before they are saddled with $1.6 billion in new taxes.

Regrettably, county hospital officials cavalierly trivialize the tax burden associated with this historic tax increase, equating its cost to a cup of coffee and actually rationalizing the timing because interest rates are low. I wonder how many homeowners who lost their homes during the Great Recession think that argument sounds logical.

The truth is Arizona's property-tax base was ravaged by the recession and many taxpayers saw their effective tax rates climb as much as 30 percent between 2010 and 2014. Proposing $1.6 billion in new taxes is hardly the helping hand those taxpayers are looking for to get back on their feet.

Prop. 480 is a poorly planned and poorly timed "Hail Mary" pass that provides the county hospital with a $935 million blank check. It has neither the support of the taxpayers footing the bill nor the private health-care providers that the county hospital should be working in cooperation with.

I strongly encourage you to vote no on 480.

Kevin McCarthy is president of the Arizona Tax Research Association.