Clarification: A previous version of this article stated that property tax revenue would also support the expansion of El Paso Children’s Hospital. UMC officials said property tax revenue is not going toward the expansion.
The average El Paso homeowner could soon pay about $442 in annual taxes to the hospital district for University Medical Center of El Paso – or about $38 more than last year.
El Paso County Commissioners Court will vote whether to approve the El Paso County Hospital District’s proposed tax rate and budgets on Aug. 28. The district comprises UMC, El Paso Children’s Hospital, outpatient clinics and primary care centers, and other affiliated programs.
The district proposed an operating budget of $1.4 billion for fiscal year 2024, an increase of more than $18 million over the 2023 budget. About half of the operating budget covers salary and wages, employee benefits, supplies and pharmaceuticals.
UMC alone is budgeted for $921 million next fiscal year, which is $143 million more than in 2023.
In the budget presented to the commissioners court this month, upcoming expenditures include merit raises and a minimum wage increase from $14 to $15 per hour for UMC employees, as well as a build-out of the eighth floor at El Paso Children’s Hospital to accommodate additional beds. The new UMC surgical hospital also has a tentative opening date of Oct. 1.
UMC CEO Jacob Cintron referred to a map of the hospital district’s 24 clinics, hospitals and specialty centers located throughout El Paso and noted there are still gaps in coverage.
“We’re working with that while at the same time addressing some of the capacity constraints both UMC and El Paso Children’s have gone through,” Cintron said. “Now for all that, we can build all the brick-and-mortars we want, but the key for all that is our foundation, which is a resilient workforce. You can have the bricks, you can have the mortar, you can have the equipment, but without the people to run them, we’re not going to go far.”
El Paso County Commissioner David Stout said he believes it’s necessary for UMC to raise wages to attract and retain workers. He recalled during the start of the COVID-19 pandemic when UMC had to contract travel nurses to meet the demand of a public health crisis.
“That to me is a testament to why we need to invest in our workforce so we don’t have to lose nurses and go down that road again and shell out so much money for travel nurses,” Stout said. “There’s a lot of turnover in the health care world. It’s difficult sometimes, being a public hospital, to keep up with the salaries and what’s being offered at some of the private institutions.”
The hospital district is proposing a tax rate of 23.6 cents per $100 of property value – the highest rate it can impose without voter approval. That’s more than a penny higher than the no-new-revenue tax rate, which is the rate needed to collect the same amount of property tax revenue as last year on the same properties. Adopting the voter-approval rate would generate $11.6 million more in revenue than under the no-new-revenue rate.
The property tax impact to individual homeowners will depend on their home valuations, which have shot up in the past several years. For the owner of a home valued at about $187,000 – the average in the hospital district this year – adoption of the voter-approval rate translates to the $38 increase to the hospital’s portion of the overall tax bill.
UMC is the only nonprofit hospital in El Paso and provides care to underserved patients. It also functions as a teaching hospital for Texas Tech University Health Sciences Center El Paso.
“This budgeting and setting up tax rate is always something that’s difficult because we want to make sure we are providing the highest level of care to folks in this community,” Stout said. “(UMC) is a safety-net hospital, but that doesn’t mean the deliverable care has to be subpar.”
Property taxes would account for 11% of the hospital district’s revenue, while patient services, health insurance premiums and Medicaid supplemental payments account for the bulk. That revenue would go toward bond debt and day-to-day operations for the growing district, which also includes El Paso Health, the medical insurance group for employees, and UMC Foundation, the hospital’s charity.
Last year, the hospital district sought county approval for $346 million in certificates of obligation – a bond that doesn’t require voter approval in an election – to expand UMC and El Paso Children’s Hospital. But the request stalled after a petition led by conservative advocacy group the LIBRE Initiative collected enough signatures to put the bond up to a vote. The bond did not appear on the ballot of El Paso’s next election.
Now the district will fund the eighth-floor build-out of El Paso Children’s Hospital from a $10 million debt payment the hospital is making in 2024. The Children’s Hospital declared bankruptcy in 2015 and still owes millions to creditors, including UMC.
Cintron told El Paso Matters that UMC does not have another bond initiative to announce to the public.
The commissioners court will vote on the UMC tax rate and budget the same day it’s set to adopt the county’s tax rate. The court is also considering adopting the county’s voter-approval rate, which could translate to an increase of about $100 a year in county taxes over last year on the average-value home.
The adopted tax rates would apply toward the 2023 tax bills that go out to property owners in January.