Vote Sought on Austin Medical School Debt

DALLAS — Travis County, Texas, voters should be given the opportunity in November to raise the hospital district’s property tax rate to support construction of a new medical school in Austin, state Sen. Kirk Watson said Monday.

The school and related clinics would be part of the University of Texas system. A recent UT study said building, equipping, and operating the facility would cost $4.1 billion over 12 years. The study included $233 million of construction debt as part of the financial plan.

Watson proposed a 5-cent hike in the property tax rate for the county’s health agency, Central Health, which is currently 7.89 cents per $100 of assessed value. 

The additional tax would generate $50 million a year beginning in fiscal 2014 if voters approve the increase in November.

Central Health trustees are expected to consider the financial aspects of the proposal at a retreat this weekend. The board must set the tax election by Aug. 15 to get the tax increase on the Nov. 6 ballot.

Watson has been promoting the establishment of an Austin medical school as an investment in better health care in central Texas as well as an economic engine for the region. After 11 months of planning, he said the need is clearer than ever.

“It’s time to move forward, to take the next step,” Watson said. “It’s time to create a 21st century system that will help our friends, family members, neighbors and ourselves live longer and happier lives.”

Raising the tax rate now would allow Central Health to leverage every $1 of local investment in improvement efforts with $1.46 of federal funds as part of an expansion of Medicare programs, Watson said.

The hospital district’s current tax on an average residence valued at $215,000 would go to $277 per year from the current $170 if the 5-cent hike is approved.

Watson said the medical school and hospital would create 15,000 permanent jobs and generate $2 billion of economic activity annually. The University of Texas System Board of Regents voted in early May to contribute $25 million a year to operations of a medical school in Austin if locals provided $35 million a year.

“For an annual public investment of $35 million, we can create an asset that’s worth billions to our region and economy,” Watson said.

The UT regents also pledged $5 million a year for eight years to buy medical equipment for the proposed school. The university’s contribution will come from the Permanent University Fund, and the level of funding will be reviewed 10 years after the teaching hospital opens.

Seton Healthcare, which operates Austin’s Central Health-owned University Medical Center Brackenridge, has promised $250 million to the medical school effort.

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