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Holiday Shopping for Health Care in Hidalgo County

Updated: Aug 13, 2021

Twice now, Hidalgo County residents clearly told their political, educational, and health care leaders they do not want more property taxes – even for a worthy cause like a hospital district. Yet, this holiday season there are a few gift options that can get residents improved health care without the gift that keeps on taking -- annual property taxes.

Municipal Hospital Authority

First, one or more cities can create a Municipal Hospital Authority to finance the construction, purchase, enlargement, or equipping of one or more hospitals through tax-exempt bonds. However, the Authority does not have authority to implement a “new and unimproved” property tax. Rather, bonds would be paid through patient revenues, in effect a user fee. Sounds good so far? But wait, there’s more.

The Authority can also operate the hospital or create a not-for-profit corporation to operate the hospital. Cue testimonial: This has already been done in Hidalgo County. In 1977 the City of Weslaco created the Weslaco Hospital Authority to help finance improvements at Knapp Medical Center.

This allowed Knapp to get better terms for financing their capital projects because the Authority transformed their privately-issued bonds into publicly-issued, tax-exempt bonds.

And, since no property taxes were used in the creation of the Authority, it only required the majority vote of the city council rather than voter approval. Voters remained protected by an optional referendum on the revenue bonds. Consequently, creation of the Authority kept the city out of the naughty complexities of managing a hospital, provided favorable financing options, and expanded health care delivery. It’s a Festivus miracle!

Health Facilities Development Corporation

A second gift option is a Health Facilities Development Corporation. Generally, this is like a Hospital Authority. A key distinction is that a Development Corp. also allows counties to join in fun by financing health facilities.

Furthermore, a Development Corp.’s broader stated purposes encompass not only health care, but also research and education. Hospital Authorities tend to be limited to health care service, but have some authority to finance projects also related to health education and research. Humm…

Both Development Corps. and Authorities have varying authority to finance hospitals and clinics, labs, pharmacies, and other health-related facilities. This is new and improved.

Again, Weslaco took the lead in creating just such an entity to finance additional expansion of Knapp over the years resulting in better financing rates, expanded medical facilities, no government bureaucracy, no general election, and no … wait for it… no property taxes. Yes, Beto, there is a Santa Claus!

Hospital District?

Third, there is no third, unless Hidalgo County wants to settle for the proverbial lump of coal. Chiclets? Alternatively, a city or cities and/or Hidalgo County could create and use an Authority, a Development Corp., and/or a not-for-profit hospital as Legos to build hospitals, clinics, research labs, and classrooms to provide health care and educational opportunities to their residents.

These are the building blocks for regional delivery of health care and regional training for health care professionals. McAllen, Edinburg, Mission, Pharr, Weslaco, and other cities could take these Legos and finance and/or operate a hospital. Or, Mission need not participate. Again, there are no property taxes, and bonds are amortized through essentially patient revenues.

To really get creative, Harlingen or Starr County may join in the fun in some capacity as permitted by the Texas Health and Safety Code. The code provides statutory authority for Municipal Hospital Authorities and Health Facilities Development Corporations. No further legislative action from Austin is needed. This would be a local, regional and Valley decision.

These facilities can be used by medical and allied health students at the University of Texas Rio Grande Valley and South Texas College to train and prepare for their careers. High-wage jobs lead to more economic activity for our business community. Valley residents have improved access to direly needed health care. Win, win, win.

A Festivus fairy tale? Maybe. It’s up to us and our leaders to select the right gifts for ourselves, our families, and our future.

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