Central Health leadership gave preliminary approval Wednesday to a $884 million budget for the 2024-25 fiscal year. The budget will go before Travis County commissioners for a final vote in September.
As Travis County’s public hospital district, Central Health is tasked with funding health care for low-income and indigent residents, primarily through tax revenue. The organization’s board of managers voted on a new tax rate of 10.7969 cents per $100 of valuation at their Wednesday meeting. That would increase the average local homeowner’s tax bill by $66.
What’s in the budget?
Central Health plans to spend more than $353 million on health care services this year, including a record $60 million on services offered directly by Central Health at its clinics and other sites.
Until recently, Central Health exclusively partnered with other organizations to provide health services. That includes Ascension Texas, which operates Dell Seton Medical Center, the local hospital designated with serving indigent and low-income residents. But as part of Central Health’s Healthcare Equity Plan, the hospital district will progressively invest in building more clinics and offering more direct health services over the coming years.
Central Health expects the Healthcare Equity Plan to cost nearly $700 million over a seven-year period. A large chunk of that funding is coming from the district's sizable contingency reserves, which Central Health will progressively draw on. This year, Central Health will draw $98.3 million, leaving nearly $396 million in the fund.
The health district is budgeting to add approximately 386 full time employees to its roster in the coming year. It also plans to fund new specialty services, including rheumatology and endocrinology, and will raise its investment in medical respite care, which provides a space for people experiencing homelessness to recover after a hospital stay.
“I'm very proud of a whole lot of things in this budget, and I especially want to call out something that's always been very important to me, and that is the medical respite program,” said Ann Kitchen, president of Central Health’s board of managers. “It is incredibly forward-thinking, the approach that Central Health is taking to really tackle what is a very difficult issue in our community, particularly for people of color.”
Earlier in August, Central Health voted to renovate the former Children’s Hospital of Austin to create a downtown medical respite facility. The proposed budget includes $11 million for that project.
Points of contention
While the board voted to advance the overall budget, some board members expressed concerns about budget line items dedicated to payments to the University of Texas.
In addition to contracts for specific health services offered by the university, Central Health also pays Dell Medical School $35 million annually in accordance with a ballot proposition voters approved in 2012. That proposition allowed Central Health to raise property taxes to support the development of the new medical school “consistent with the mission of Central Health.”
The annual payment to Dell Medical School has been the subject of an ongoing lawsuit leveled by a group of taxpayers who say the funds have not been appropriately used to pay for health care for poor residents, but for things like research and administrative costs.
Board member Cynthia Valadez echoed these concerns, casting votes against the specific areas of the budget that promised funding to UT Austin and the UT System. Manager Shannon Jones abstained from those votes, and Manager Eliza May abstained from the vote pertaining to the UT System.
“I hope that we can get University of Texas … to understand the need for us to hold their feet to the fire and make them accountable for the tax dollars that they're receiving from our population, because we believed that they were going to target our indigents, and we just need to make sure that they really do,” Valadez said.
At a meeting earlier in August, Valadez also criticized UT’s decision to lay off staff connected to Diversity, Equity and Inclusion initiatives in order to comply with Texas law.
“I’d like for us … [to] talk about it as a board why we enter contracts or continue to pay people who are not philosophically aligned with our mission,” she said.
Up next
Because Central Health’s board of managers is appointed, not elected, its budget and tax rate must also be approved by county commissioners — a process which became contentious last year when Travis County leaders pressed Central Health on its budgeting practices.
Central Health is scheduled to present its budget to commissioners on Sept. 12 ahead of a final vote on Sept. 17. In the meantime, the county is also set to hold a public hearing to review a long-awaited independent audit of Central Health’s finances. That hearing is set for Aug. 27.
