Travis County signs off on Central Health's new budget — with a tax rate increase

Travis County commissioners approved an $875 million annual budget for local public hospital district Central Health, along with an increased tax rate that local officials said was influenced by federal funding changes.

Around 5% of a Travis County homeowner’s property tax bill goes to Central Health. Those taxes must support health care for low-income and indigent residents. Central Health’s new annual tax rate is 11.8 cents per $100 of valuation — an effective increase of more than 9% from last year. That means the average homeowner will pay around $64 more to Central Health on their next bill.

At a meeting last week, Central Health board of managers treasurer Maram Museitif said the tax increase was needed to make up for federal budget cuts affecting Central Health and local partners the agency helps to support.

“We are left without a choice,” Museitif said. “Some of the federal policies have really impacted some of the services that are currently provided. In order for us really to sustain those services, we had to make a difficult choice of raising the taxes.”

The 'year of access'

Over the past year, Central Health has gone through considerable negotiation with its partner organization, CommUnityCare, which oversees most of the clinical care funded by Central Health. After a drawn-out conflict over the role of the CommUnityCare CEO, the organization’s former chief medical officer, Dr. Nicholas Yagoda, was named to the position.

Now, Central Health and CommUnityCare — along with the marketplace health insurance provider Sendero Health Plans — are making an effort to put forth a unified image, emphasizing the three organizations as a single Central Health “system.”

As part of that effort, Central Health submitted a system-wide budget for county commissioners’ approval for the first time, a total of more than $1.1 billion for the three combined organizations. In the next year, Central Health anticipates its system will serve 209,000 people and oversee more than 1.2 million clinical visits.

Central Health branded the 2026 budget proposal as “the year of access,” with goals of expanding its clinical offerings and closing gaps in care.

Included in the budget is nearly $434 million in expenses for health care delivered directly by Central Health, a more than $80 million increase from last year. The increase aligns with the agency’s ongoing plan to bring more health care services under Central Health’s umbrella rather than exclusively partnering with outside organizations. The agency also has a “moonshot” goal of decreasing appointment wait times to no more than two weeks.

Central Health also committed funds to partner organizations that have lost federal grants this year, such as Austin Public Health and Foundation Communities, which helps local residents navigate through Medicaid and Affordable Care Act marketplace insurance enrollment. Central Health set aside $1.2 million for Foundation Communities following its loss of a $2.4 million federal grant.

"I just think it's important for the community to understand the impact that these budget cuts at the federal level are having on our community and how we are stepping up and trying to provide essential care to people," said Travis County Precinct 2 Commissioner Brigid Shea.

Additionally, Central Health committed funding to a new pilot to help local food industry employees navigate health insurance enrollment.

Dell Medical School payment remains a sticking point

In an echo of budget conversations from the previous few years, members of the board of managers were not unanimous in their decision to continue supporting the University of Texas at Austin's Dell Medical School with an annual $35 million payment, which was approved by Travis County voters in 2012.

Some commissioners expressed that they wanted to see a more thorough accounting of how the medical school had used the annual investment to pay for health care to poor residents. That full picture is complicated to compile due to Dell Med’s relationships with partner organizations who sometimes deliver the care; Central Health CEO Pat Lee told commissioners that updated data would be available at a quarterly update in December.

Others said they were uncomfortable supporting the university at a time when it was rolling back diversity, equity and inclusion initiatives.

While a majority of the board voted to approve the payment, manager Shannon Jones said the split vote should send a message to UT Austin.

“The board is divided on [the medical school's] success and what they’re doing,” Jones said last week. “We’ve willing to work with them, but they’ve got to produce.”

Central Health board chair Ann Kitchen, however, gave commissioners a positive report of Dell Medical School's relationship with the board.

“We are pleased to have that communication occurring, and we are working on continued communication and collaboration," she said.