A Stupid Question: Why Does Montgomery County Hospital District Collect Taxes From Us?

A Stupid Question: Why Does Montgomery County Hospital District Collect Taxes From Us?

Image: The Montgomery County Hospital District’s gigantic headquarters building on South Loop 336 in Conroe.

Conroe, August 1 – The Golden Hammer, Montgomery County’s leading daily newspaper, has a stupid question: with the recent vote by its Board of Directors to increase the salary of its Chief Executive Officer Randy Johnson to $230,000 per year, a 3% raise, why does the Montgomery County Hospital District (“MCHD”) exist and collect taxes from us?

This newspaper posed two questions about MCHD’s two programs – indigent medical care and the ambulance service – and didn’t get very satisfactory answers:

#1 Why does MCHD provide indigent medical care in light of the existence of Obamacare?

#2 Why does MCHD run an emergency medical service?

These questions are important, because, you might be surprised to learn, MCHD’s expenditures have steadily increased over the past decade despite the fact that Obamacare would seemingly make the real reason MCHD exists – to provide indigent medical care – obsolete. During the past four fiscal years MCHD’s budgeted expenditures have grown:

Fiscal Year          MCHD Expenses                         Tax Rate                    Budgeted Tax Revenue 

2014                     $48.2 million                               7.27 cents/$100       $29.0 million

2015                      $49.5 million                               7.25 cents/$100       $31.5 million

2016                      $51.5 million                                7.10 cents/$100       $35.6 million

2017                       $53.2 million                               6.65 cents/$100       $36.7 million.

Expenses and taxes have increased during the past four years, even though MCHD lowered its tax rate each of those years as well. What’s particularly disturbing is that MCHD has operated at a gigantic surplus. In Fiscal Year 2016, MCHD’s audited financial statements showed the following:

Actual property taxes collected      $35,822,069

EMS revenues                                     $15,128,309

TOTAL REVENUES ALL SOURCES $62,273,038

EMS expenses                                     $28,396,929

Administrative expense                     $3,400,558

Indigent medical assistance              $7,030,572

Radio, facilities, IT expense              $6,195,546

TOTAL EXPENSES ALL SOURCES $45,779,829

NET (Revenue – Expense)                  $16,493,209.

In other words, MCHD overcharged taxpayers by $16,493,209 during Fiscal Year 2016!

Despite that fact, the Board of Directors at the July 25, 2017, meeting voted to give the CEO Randy Johnson a raise to a salary of $230,000 per year, plus a vehicle, and other perks and benefits. Johnson makes more than the United States Secretary of Defense James Mattis who oversees 80,000 civilians in the Pentagon as well as the entire United States Military. Mattis makes $205,700 per year.

MCHD CEO Randy Johnson, the $230,000 per year man.
Secretary of Defense James “Mad Dog” Mattis (behind uniformed Marine) earns $205,700, and supervises 80,000 Pentagon civilians as well as the 1,281,900 active personnel and 811,000 reserve personnel.

#1 Why does MCHD provide indigent medical care in light of the existence of Obamacare?

The Affordable Care Act (“ACA”), also known as “Obamacare,” expanded health insurance coverage to approximately 24 million uninsured Americans and also provided states with the option of expanding the Medicaid program to cover many others who could not afford private health insurance. The State of Texas’s Governor Rick Perry (now Secretary of Energy) opted out of the Medicaid expansion. As a result, Texas has the largest number of uninsured citizens in the United States.

There was a lot of misinformation when the ACA originally passed into law. First, it doesn’t provide universal healthcare. Second, it poses a severe burden on many states, including Texas. Under the current healthcare regime, Medicaid only covers individuals who earn $1,824 per year or less, while a 2-parent family earning more than $2,724 per year does not qualify for Medicaid. Individuals earning more than $11,490 per year or families of four earning more than $23,550 per year are eligible for ACA subsidies for the purchase of health insurance through the Obamacare insurance exchanges.

Therefore, there is a gap of coverage in Texas for people who earn more than the Medicaid maximum eligibility and who earn less than the minimum ACA subsidy eligibility. That’s where the MCHD indigent care program fills the gap for American citizens who reside in Montgomery County, Texas.

There was a move in 2004 for MCHD to cover illegal aliens, but one of the board members raised a national ruckus which scared the board into avoiding that coverage.

#2 Why does MCHD run an emergency medical service?

This question is far more difficult. There are many private ambulance services which operate at a small profit or in the break-even range. During Fiscal Year 2016, MCHD’s Emergency Medical Service lost $13.2 million. That seems like a large amount of money considering that the service may charge individuals who have insurance for the medical service provided. While MCHD provides indigent ambulance services as well as some services that are questionably emergent (such as when individuals call to hitch a ride), MCHD’s EMS expenses grew by $3 million between Fiscal Year 2015 and Fiscal Year 2016, while its EMS revenue actually declined.

It probably doesn’t surprise you to learn that the biggest revenue sector which exhibited growth for MCHD between Fiscal Year 2015 and Fiscal Year 2016 was property taxes.

MCHD has accumulated substantial assets by overcharging taxpayers year-after-year. Not only has MCHD accumulated substantial cash resources but also it has gone into the business of building brick-and-mortar substations rather than posting ambulances only at fire departments. This community should look closely at why private ambulance services could not provide adequate emergency medical services.

The citizens should begin, however with a serious question: why in the world are we paying a hospital district CEO $230,000, a raise from this year, when the EMS service’s losses are increasing and the core MCHD program, indigent healthcare, is exhibiting a declining pattern of use?

 

 

 

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