Taxes in perpetuity aren’t words we normally like to see together.
But this would happen with the approval of Montezuma County Hospital District’s Referendum 6A. It asks voters to remove the sunset provision on a 0.04% sales tax in exchange for reducing the district mill levy by 25%, dropping it to 0.7455 mills from 0.994 mills, in a special district election on May 3, as reported in The Journal on March 3.
The sales tax, 4 cents for every $10, was approved in 2015 and will sunset in 2030.
The hospital district would use funds to finance $23 million in upgrades and maintenance of Southwest Memorial Hospital. It would restructure its $32 million bond debt to $55 million through the issue of revenue bonds backed by the sales tax, if the ballot measure is approved.
Additional funding would pay for an emergency department, renovations of surgery facilities, replacement of equipment and maintenance.
The funding also would pay for operation and use expenses for hospital facilities, including the new emergency department, the new patient wing, outpatient care facilities, the ambulance parking facility and “any and all other lawful purposes,” according to the initiative.
All capital, facility based improvements. No operational improvements.
We’re all for upgrading the 25-bed, critical-access Southwest Memorial Hospital. This election just feels, well, rushed. A ballot-initiative notice, mailed a few weeks ago, leaves us with the big question, what’s the return on the investment for residents, specifically property owners?
The measure is promoted as easing property taxes. The mill levy reduction would be permanent.
Robert Dobry, Montezuma hospital district treasurer, said over the next eight years, the reduction would save property owners an estimated $1.1 million. Dobry did confirm that this figure is based on current home prices. He said a residential property owner with a home valued at $347,000 would save about $47.94 over the first eight years. A commercial property of the same value would save about $182.12.
But it’s unlikely assessed property values will remain the same, so no real savings. If the past year is any indication, median sales price of a home in Montezuma County jumped from $242,500 in March 2021 to $372,000 in March 2022, an increase in 53.4%; the average sales price $297,624 to $426,553, an increase in 43.3% from the year before, according to data from the Four Corners Board of Realtors.
The taxable value of Colorado homes is expected to rise by 19.5% in 2023, according to state General Assembly’s economists’ December 2021 forecasts. This doesn’t mean the price of homes in Montezuma County will increase that much. But the cost projection is this: Going up. So will property taxes.
Note, too, the second portion of the ballot measure gives the district authority to borrow additional funds for refinancing the existing bond, and financing future upgrades and maintenance. Referendum 6A would give the district more spending possibilities.
In 2018, a $32 million campus improvement project included the medical office building, new 13-room hospital patient wing, upgraded birthing center, new front entrance and lobby, new EMS station and campus consolidation. The hospital has climbed out of financial difficulties and passed an audit in 2020.
If voters approve the measure, and the district builds it, will they (patients, staff members) come?
Separately, we’re wondering about operational efforts under Southwest Memorial’s authority, such as recruiting staff members or investing in the hospital’s moneymakers – therapies, lab work, X-rays, elective surgeries – or bettering patients’ care in specific ways. But, again, Referendum 6A wouldn’t fund this.
As newcomers migrate into and around Colorado, a hospital with stellar services and specialists is certainly a draw. That is, if Montezuma County remains affordable. Property taxes are part of that equation.
Ballot language says Referendum 6A is “for the benefit of the district and its residents.” We don’t doubt this. Again, whenever taxpayers are asked to remove a sunset, we look deeper at details and levels of community engagement. We’d like to see more of the latter.
