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Forum focuses on taxes, hospital debt

Hospital debt and property taxes got most of the attention at a League of Women Voters forum Wednesday night regarding a ballot measure that would make Grays Harbor Community Hospital a public entity. Voters are deciding the issue now and ballots will be counted Aug. 5.

Community Hospital CEO Tom Jensen served as spokesman for the pro-hospital district camp at the meeting, while Jim Walsh, of the Grays Harbor Republican Party, spoke against the measure. Dave Haviland, of Jodesha Broadcasting, moderated the discussion and audience members were allowed to submit comments to Jensen, Walsh and other panelists using note cards.

Property taxes

Walsh argued that he doesn’t want the hospital to fail, but creating what would be known as Grays Harbor Public Hospital District 2 isn’t the only solution. He equated the measure to a bailout. He said citizens would be better served if hospital administrators instead tried to cut costs and restructure current debt.

“I support the hospital, and I think everyone here supports the hospital,” Walsh said. “But you can support the hospital and vote no for this bailout.”

In the end, citizens would be stuck with the debt if the hospital goes public, Walsh said.

And regardless of what hospital administrators and potential commissioners say, citizens would be stuck with increased property taxes — especially if the local economy doesn’t improve.

“They can say (that they won’t create a tax), but efforts to avoid the tax will be futile,” Walsh said.

One citizen asked whether taxpayers would see a reduction in their bills to offset the property taxes they would pay. Jensen said that would ultimately be up to newly elected commissioners, but people who live in the district could see discounts on their hospital bills. “I’ve seen it done before, and it could work for us,” he said.

Hospital debt

For much of the discussion, Walsh focused on the hospital’s $33 million in bonds and argued that citizens shouldn’t have to take on that much debt. He proposed that hospital administrators attempt to renegotiate the debt instead of creating a public hospital district, and even offered to help with the negotiations.

“I’m not being sarcastic, I’m really offering,” Walsh said.

But Jensen asked that voters think of the bonds as a mortgage, not a debt, as the debt was incurred to maintain the hospital and build a new emergency room.

“You wouldn’t pay cash for a house, and this is the same,” Jensen said.

He argued that most other hospitals, both public and private, have similar debt, and that incurring debt was necessary to run a hospital properly.


One citizen asked whether the hospital would continue to provide care for Medicare and Medicaid patients if Community Hospital becomes a public entity.

Jensen said it would — and that’s the point of the measure. He explained that becoming a public hospital would allow Community Hospital to better serve Grays Harbor’s large population of Medicaid patients by giving the hospital access to higher reimbursement rates made available by the Legislature.

Jensen estimated that the hospital could see an additional $3 million per year in Medicaid reimbursement — but only rural, public hospitals can receive the higher reimbursement.

But Walsh said there’s no guarantee that the revenue stream would last forever, and Grays Harbor citizens would be stuck covering hospital costs through tax increases were the higher reimbursement to stop. But Jensen argued that that scenario isn’t likely.

Consequences of failure

Walsh accused Jensen and other hospital district proponents of over-stating the consequences of the measure failing. He said there’s no way to know what would happen, and there would likely be other ways to save the hospital money.

“I think that it’s been overplayed that the hospital will shut down, that there will be no hospital here,” Walsh said.

Jensen argued that while it’s impossible to say which services would be trimmed if the measure fails, there’s a good chance that Community Hospital would no longer be able to operate as a Level 3 trauma facility — meaning that many patients would need to travel to Olympia or Centralia to receive care.

“This community needs a trauma center,” Jensen said. “We’re 50 miles out from another tertiary care center.”

Failure of the measure could also lead to a loss of jobs, Jensen said — jobs that Grays Harbor needs. He argued that in an era when more jobs are being lost than created, an additional $3 million would do the community a great deal of good.

“Who else is coming into the community to set something like that up?” Jensen asked.

But Walsh called Jensen’s argument misleading, arguing that bringing the $3 million into the community would be “robbing Peter to pay Paul,” given that the additional state funding would come from tax revenue.

“That’s our money to begin with,” Walsh said.

Other panelists

Halfway through the meeting, eight additional panelists took the microphone to answer questions. Jensen had to leave the forum early to speak at a meeting hosted by Grays Harbor Fire District 2, and was replaced on the panel by hospital Chief Operating Officer Larry Kahl. He was joined on the pro-hospital measure front by Grays Harbor College President Ed Brewster, Dr. Anne Marie Wong, Patrick Wadsworth of the Grays Harbor Democrats and Montesano resident Lisa Smith.

Walsh was joined in arguing against the district by Aberdeen City Councilman Alan Richrod, Ocean Shores resident John Farra and Claudia Woodward-Rice of Central Park.

Both Richrod and Woodward-Rice said they’re not necessarily opposed to the measure, but opposed to how rapidly it was introduced and the lack of information available to citizens.

“I am on the con side, but I’m not against it,” Richrod said. “I am against the way it is being handled.”

He argued that citizens would be better served if the measure were to appear on the November ballot instead.

Farra simply said he was “an advocate for no” without offering a detailed explanation why.

Smith, Wong, Brewster and Wadsworth all argued that preserving Community Hospital would be good for Grays Harbor both economically and socially. Smith and Wong both said that expectant mothers should be able to receive care within their own community instead of having to travel to Olympia.

“How much do you want to bet that when these people drive to Olympia they’ll shop in Olympia and eat in Olympia?” Wong asked.

Election information

Ballots including the Grays Harbor County Public Hospital District 2 measure have already been mailed to voters. Ballots are due by Aug. 5 and final vote counts will be tallied in the days following the election.