Travis County commissioners pass Central Health's $744 million budget but questions remain

Travis County commissioners approved this week a $744 million budget for Central Health, allowing the hospital district to add coverage that includes opening three new clinics and expanding specialty care for the 100,000 county residents enrolled annually in its health plans.

The new budget includes a 6.5% tax rate increase, so county residents can expect about a $478 charge, up from $422.29 annually, for the average home in Austin, appraised at $475,286.

Central Health provides health care for people at or below 200% of the federal poverty level. For a family of four, that is an annual income below $60,000.

Because Central Health's board of managers is appointed, elected commissioners must approve its budget and tax rate by Oct. 1 each year.

Tuesday was the third week in a row Central Health was at the Travis County Commissioners Court to get budget and tax rate approval. It has faced heavy criticism from commissioners and community advocates about the tax increase and the budget.

The tax rate moves from 9.8684 cents per $100 valuation to 10.0692 cents per $100 valuation.

The approved budget and tax rate "allows us to continue the activities we have already started," Central Health Chairperson Dr. Charles Bell said.

It will open its new Hornsby Bend Health and Wellness Center next month, the Del Valle Health and Wellness Center this fall and the renovated Rosewood-Zaragosa Specialty Care Clinic next year.

It will begin the first year of its seven-year health equity plan, which includes 150 programs.

What changed from the weeks before?

To get the budget and tax rate approved, Central Health held its own board of managers meeting Monday and altered its budget to include or make more apparent initiatives the county commissioners wanted:

• Provide health care to people in the Travis County Jail. Central Health added $2 million to the budget and will now enroll people who are incarcerated into its health programs.

• Increase spending on mental health care. Central Health added $7 million to help Integral Care, the mental health authority for Austin and Travis County. It plans to create a formal agreement with Integral Care to provide more care.

• Increase substance abuse treatment by spending $4.7 million for care and $100,000 in substance abuse direct services.

• Put $1.5 million into a pilot diversion project that will place people in mental health crises or with substance abuse problems into a diversion program instead of in the hospital or in jail.

• Increase its medical respite program. It budgeted $1.5 million for care after a hospital visit or nursing home stay.

• Increase care for unhoused people by spending $11.7 million on its street medicine team in 2024.

• It also added another $500 million for more days of care and to add a mental health provider at the Black Men's Health Clinic, a $1 million commitment.

Why did Central Health need the tax increase when it has $455.3 million in contingency reserves?

Central Health said that to begin its seven-year health equity plan, the district is using $30 million from its reserves in 2024 and would use reserve funds to complete the work.

If the tax increase had not been approved, Central Health said its reserve funds would dip below the targeted cash-on-hand threshold of about $120,000 by 2029. By 2030, Central Health would be out of its reserves and be operating with an estimated $13 million deficit.

Central Health Board Manager Maram Museitif compared the current health system before the health equity plan begins to a potluck without all the components. Without coordination, she said, "our health care system feels like a disjointed potluck. ... We're missing key components. This year's proposed budget aims to fix that."

Inside the budget: Central Health proposes $744.2M budget. How much will property taxes increase if approved?

What were Central Health's critics' biggest objections?

Critics, including representatives from the NAACP and the League of United Latin American Citizens, wanted the commissioners to pass a no-new-revenue-tax rate.

"You should wait until the performance audit is completed and until your questions are answered as to where the money is going," said Fred Lewis, a lawyer and one of the people behind a 2017 lawsuit against Central Health alleging misuse of public funds including $35 million annually that Central Health gives to the University of Texas Dell Medical School.

In April, commissioners hired tax and advisory firm Mazars USA to produce the audit, at a cost of $845,200. Central Health CEO and President Mike Geeslin said Central Health staff began meeting with the auditors this summer, but it needed an interlocal agreement between Central Health and the county for Central Health to provide Mazars with information, he said. That agreement was signed Monday.

In addition to the 2017 lawsuit, Central Health and Ascension Texas, the owner of safety net hospital Dell Seton Medical Center, also are suing each other for breach of their care agreement.

Geeslin expects the performance audit to be done by next June, but the county has authority over the timing, he said.

Questions asked: 'It's not going well for you': Travis County commissioners tell Central Health on budget

What will change in the future?

The commissioners have asked for quarterly meetings to review the budget with Central Health and not have the last-minute scramble to pass a budget and tax rate every September.

"I'm excited about moving forward and meeting the needs of the people," Commissioner Ann Howard said.

This article originally appeared on Austin American-Statesman: Travis County commissioners pass Central Health $744M budget, tax hike