York Hospital CEO pleads with lawmakers to ditch tax hike: 'Give us a chance to survive'

AUGUSTA, Maine — York Hospital CEO Patrick Taylor pleaded with a state House committee Monday not to lift millions of dollars in tax exemptions he fears will mean the end of York Hospital.

State health officials are looking to invest $90 million into MaineCare to help medical centers across the state. The proposal is included in the supplemental budget currently with the Maine House Committee on Appropriations and Financial Affairs.

“Some hospitals will benefit from this proposal,” Taylor told the committee. “Unfortunately, we would be crippled financially.”

DHHS and the Maine Hospital Association announced in early February their "$90 million investment" in MaineCare, stating it would "maintain or increase payments to every medical center in Maine and improve care for Maine people." As part of this plan, however, taxes would be raised at all Maine hospitals and York Hospital would, after five years, lose a multi-million-dollar tax exemption.

The proposed tax increase for York Hospital is estimated to be about $2 million a year. After five years, the plan will also eliminate about $5.6 million in annual tax exemptions the facility has had in place since the late 1990s. The York Hospital exemption was put in place because of its location in a tourist community with a fluctuating population that surges in summer, located near competing hospitals in New Hampshire.

“That is not sustainable for York Hospital,” Taylor said.

Taylor said York Hospital is currently taxed on net revenue but already ends up $1.6 million in the red. He said if the changes pass as proposed, the negative will increase by $2.4 million. Take away the $5.6 million the hospital gets in tax exemptions, the hospital would be down almost $8 million, he said.

Taylor asked the committee and DHHS to consider maintaining York Hospital’s current exemptions that have been in place for decades. He asked they increase the substantial payment proposed in the budget to help offset the proposed taxes.

“That would give us a chance to survive,” Taylor said.

Previous story: Maine tax increase for York Hospital could be 'death knell,' local leaders warn

York lawmakers from support hospital at hearing

State Rep. Holly Sargent, D-York, and state Sen. Mark Lawrence, D-York, described York Hospital as critical as an employer to 1,100 people and a provider of health care to many older residents. They noted the seasonal vacation population that comes to York and its surrounding towns relies on the hospital as well.

Sargent explained many people have come to live and work in York with the understanding the hospital is in town. At the same time, she said, the town already provides a significant amount of money to the state through income tax and York’s robust hospitality taxes.

“We do our part,” Sargent said. “I recognize the statewide need for the new system DHHS is proposing … the vibrancy and safety of a critical part of the state should not be sacrificed.”

Lawrence said York is unique because it is part of a multi-state metropolitan region known as the “Seacoast,” which he described as spanning the Kennebunks, in Maine, into New Hampshire and south to Amesbury, Massachusetts. He said residents in York and the rest of that region are removed from other metro areas like Portland and Boston.

If York Hospital were to close, he said, it would put Seacoast residents of Maine in a position where they may need to go out of state for health care. He warned that would bring them out of the network regulated by the state of Maine and could complicate the process of finding proper care.

“We can’t afford to lose this hospital,” Lawrence said. “This position taken by the DHHS is a poison pill for the hospital. It is a pathway to closure.”

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Local lawmakers hopeful committee will consider their pleas

Lawrence said the committee is expected to work on the supplemental budget in the coming weeks and release it mid to late March. In the meantime, he said he plans to speak with individual members of the committee, as well as the governor.

Lawrence said protecting York Hospital has been a challenge in the past, pointing to when he and other lawmakers led an initiative to get the hospital the tax exemptions 20 years ago.

"The exemptions were put in place because York Hospital services a large population in the summer when tourists and snowbirds are in the area and a much smaller population in the off-season," he said. "This helped the hospital hold sufficient staffing through the winter months, so they'd be ready for the crush of summer. It also allowed the hospital to hold strong against HCA and Wentworth-Douglass."

HCA owns Portsmouth Regional Hospital and Frisbie Memorial Hospital of Rochester in New Hampshire. Wentworth-Douglass Hospital is in Dover, New Hampshire, and owned by Mass General Brigham.

Lawrence said he's hopeful they will be able to convince lawmakers of the importance of York Hospital.

“I’m never overly optimistic, but we’ve been down this road before,” Lawrence said. “It’s always a process, it is a process to educate the state on the uniqueness of this hospital.”

This article originally appeared on Portsmouth Herald: York Hospital CEO urges Maine lawmakers to nix tax hike