Update: This morning, Sept. 14, the Orlando Sentinel published THIS article by Steve Hudak on the Constitutionality lawsuit mentioned below.
Tavares, FL - Sept. 13, 2012 - Yup, Wednesday night, Sept. 14th, at 6pm in the round Lake County Administration Building in Tavares, is the second required meeting for the Board of the North Lake County Hospital District to vote to give away $8-million of property tax funds without any rules on how the funds are to be spent, and where many affected taxpayers never actually got to vote on the tax.
Currently there is a lawsuit challenging the Florida Constitutionality of the District, and there is an investigation of the District by the Lake County Legislator's delegation, plus a investigation of all Florida Hospital Tax Districts by a Committee initiated by Florida Governor Rick Scott.
Last Wednesday was the first of two required meetings where the Board must approve to collect (through the County taxpayer) 1 mill of property taxes, or to vote to not collect ANY mills (0 mill rate).
The Hospital advocate controlled Board has NEVER voted NO mills, and always voted for another annual 1 mill tax.
We encourage you to attend the meeting. Most likely the four Hospital advocates will
The Hospital tax advocates on the Board are:
- Ken Carpenter
- Roger Byers
- Robert E. Bone, Jr.
- Jerry Brown
The tax reform advocates are:
- Marilyn Bainter
- Fran Grossi
The existing regulation for the District specifies that the 1 mill tax collections, approximately $8-million this year, will be split between two North Lake County hospitals, Waterman and Leesburg. In turn, they each provide 5% of their share to a third smaller hospital, Lifestream.
(Note: This article and issues described here are NOT about the separate South Lake County Hospital District, which is run differently.)
Here are the reasons why tax reform advocates, including FiscalRangers.com, are trying to eliminate the tax or revise the regulations to improve accountability:
- Out of 67 Counties in Florida, only 10 have one or more Hospital Districts, leading to the question how hospitals in the other 57 counties are able to exist without a tax district subsidy.
- Out of ALL Hospital Districts in Florida, this North Lake County District is the ONLY District that does not own hospital facilities which they run or lease out to hospital management firms. In other words, those Districts were created to build and operate local hospitals, and many have sold some or all of their facilities, or still run them or use managers to run them. Lake County is the ONLY Hospital District that just collects a tax and hands all the funds over to local private non-profit corporations as a subsidy (we call it corporate welfare).
- About half of the residents being taxed never were given a right to vote on the tax, which is required by the Florida Constitution. Basically, two prior districts were merged in a vague, local deal without initiating a voter approval process. This is the basis for a Constitutionality lawsuit filed by local tax reform advocate and current District Board member Marilyn Bainter. It was filed in early 2010, and after almost 20 months and two courtroom hearings, Judge Singletary is expected to soon issue a ruling, which probably will be appealed by the losing party. On Sept. 14th, the Orlando Sentinel published Steve Hudak's update on this lawsuit HERE.
- The tax has been in place for more than 40 years without any sunset provisions or requirement for a "re-vote" every 10 years.
- The District regulations are extremely vague on how the funds can be spent. Basically, the regulations say the funds are for "continued hospital services" which basically means anything. As an internal auditor, I am personally appalled that the regulations contain no sections defining allowable and non-allowable expenditures, which is common in government and foundation grants. For instance, a charitable foundation may give funds to children's charities but specify funds could only be spent on direct services, not overhead, etc. and they may even examine staff salaries to ensure they are not excessive. There are NO such rules in these Hospital District regulations, thus the Hospitals can spend the money on pink flamingos for the lawn, excessive salaries or building renovations and there are no rules or oversight procedures to prevent that. That is why I say there is no oversight on the funds, although there are financial audits to ensure funds were paid to the hospitals, and that is about all.
- Leesburg Regional Hospital has shifted millions of dollars in the past to build the separate Villages Hospital, which benefits Sumter and Marion County residents of the Villages area. Thus some Lake County tax funds have allowed such transfers (in our opinion) WHILE Sumter County residents turned down any similar Hospital District tax. So, Lake County taxes are subsidizing health services for Sumter and Marion Counties.
- Waterman Hospital reports significant positive cash flow (profits?) every year, and pays overhead to their parent company, Adventist Health Systems. They pay very large salaries to staff, but yet claim they need this taxpayer subsidy (corporate welfare). If this was a true need for the hospitals, and the full Board acted to protect taxpayer interests, there would be salary caps and other restrictions on spending until the need for the taxpayer subsidy was over. Salary caps and other conditions have never been discussed at the Board meetings.
- All three Hospitals receiving funds are non-profits. As a condition of being a non-profit, which means they don't have to pay millions in taxes like for profit clinics, the Hospitals were supposed to agree to absorb all indgent care expenses. However, they insist they still need a taxpayer subsidy while also not paying taxes like many local clinics. I don't believe they should receive any tax subsidies due to their non-profit status and not paying other taxes.
- Questions exist about the separation of Church and State, since the Florida Constitutional requires the separation and I am told it says tax funds are not to be paid to religious organizations. Waterman's parent company, the Adventist Health System, is religion based. This issue is also part of the Constitutionality lawsuit mentioned earlier.
- In the last election, there were three vacancies. Three tax reformers, supported by the North Lake Tea Party ran against three Hospital favored candidates. The result was that one reformer, Fran Grossi, won and two Hospital advocates won. The interesting thing is that the three hospital advocates ran as a slate (as did the reformers) but someone distributed an illegal campaign flyer by mail which did not identify who paid for it. That violated election laws, a complaint was filed, and the printer paid a minor fine. This type of ethical lapse might be another reason that reform is needed.
- For the last three years, reformers have asked the five members of the local Lake County Legislator's delegation to revise the millage rate from 0 or 1 mill to 0 to 1 mill, allowing more flexibility in the tax approved by the Board. In each case at least three of the five Lake County Legislators have refused to even meet or take action to enact reforms. However, this year, newly elected Representative Larry Metz, a practicing attorney, has been investigating why, since a Florida law apparently clearly specifies that Legislators are responsible for oversight of the Special District. At last Wednesday's meeting, the District Board Chairman, Ken Carpenter, did state he had received a questionnaire from Representative VanZant regarding records of the District, etc.
There are numerous other issues related to this District, so I encourage any North Lake resident to attend these meetings and provide support to the tax reformers, AND provide public input at the Board meetings about why you think the Hospital District tax should be abolished, voted on again in a referendum (after revisions in the law), or any personal statement about the legitimacy of the tax.
Be there tomorrow, Wednesday, 6pm, in the Lake County round Administration building to provide support or public input. Get there early for a seat.
vj
You can monitor issues regarding the Hospital Tax District at these websites:
http://northlakecountyhospitaldistrict.com/ - Implemented by the tax reformers.
Facebook: https://www.facebook.com/FixNorthLakeCountyHospitalDistrict - for reformers
Click HERE to see all FiscalRangers.com articles on this Tax District, including links to Orlando Sentinel and other articles.
