Austin @ Large: Money Changes Nothing
The $33 million question: Will the city and county ever get along?
By Mike Clark-Madison, Fri., Aug. 13, 2004
To recap: Two years ago, when the city's fiscal outlook was at its bleakest, City Hall moved $33 million that had, theretofore, been booked to Brackenridge Hospital, into a new "budget stabilization reserve" in the cash-strapped General Fund, primarily (city leaders say now) to comfort the rating agencies that pass judgment on the city's bonds. And there the money remains today, untouched, separate from other General Fund reserves, and with no specific plans for its eventual use.
Meanwhile, at this same time, the effort to get the hospital district was just getting airborne. During the months of work leading up to the passage of 2003 legislation enabling the district, and then to last May's election creating it, and then to the appointment of its new Board of Managers – indeed, up until last week – the city and county appear to have had quite different understandings of how much, if any, of that former Brack money was headed the district's way, as a city "asset" to be transferred along with the hospital itself. When it became clear, with the release of the city's proposed fiscal 2005 budget, that the answer was "none," all hell broke loose.
Pot vs. Kettle
In the last week, various county leaders – most vocally, Commissioners Karen Sonleitner and Gerald Daugherty, County Auditor Susan Spataro, and former County Judge Bill Aleshire – have turned the volume up to 11, accusing City Hall of stealing Brack's money, misleading the Legislature and the voters, keeping these shenanigans under the radar, and kneecapping the district financially before it even leaves the cradle. This county posse didn't agree among themselves about the need for a hospital district in the first place, but they agree now, and reportedly the down-the-chart staff at the county feels even more strongly.
The city responds that Austin taxpayers have, over the last two decades, spent well over $600 million to operate the rickety contraption that is local public health care, and that City Hall is willing to continue that largesse in other ways – picking up the administrative overhead for the district, giving it cash advances until its own tax revenues come in, and so on. Nor has City Hall ruled out contributing more than the $3 million it has already laid on the table to the hospital district's reserves – although the city claims this amount (representing a 5% reserve) should be perfectly acceptable to the bond houses, even if the county's financial policy is to maintain 11% reserves. But the $33 million is not going anywhere.
To which the county responds, basically, quit your whining: We have to foot the entire bill for the criminal justice system, which has cost far more than $600 million. To which the city responds, sure, but you're a county, and you have to pay for crime and courts just like the 253 other Texas counties, whereas we have borne a public-health burden that far exceeds that of any other Texas city. And the courts and jail are about all city residents get in the way of county services, despite Austin's representing 80% or more of the Travis Co. tax base, so if you want to rumble about equity, well, bring it on. To which the county responds ... well, you get the idea.
As I write this, cooler heads, or at least calmer voices, have emerged, but the tone has been set, and it's not hopeful. The grownups – and, sotto voce, the hospital district board, thrust in the middle of this mess literally from day one – would like the district's financial fate to be decided outside the political arena, which is a little like wanting fish to walk on land so they'd be easier to catch. But it's likely that some sort of compromise will nonetheless emerge, and the city and county can be friends again – at least in front of the children.
Unhappy Together
More than one player has compared this spat to a nasty divorce, which is troubling at a time when the city and county need to be getting more intimate. It is a sad dispute, as divorces often are, because both parties are, at least in my view, sincere in their beliefs and motivated by what they think is best for the hospital district. Since we reported on the 2002 transfer when it happened, I can't say I agree that the city was keeping secrets. But beyond that, I suppose dirty self-dealing, or whiny money-grubbing, is in the eye of the beholder.
I have entertained the thought that some at the county are laying down suppressing fire on the PR front here, in the event it decides to, or feels compelled to, adopt a tax rate for the hospital district that is higher than the revenue-neutral level suggested during the run-up to May's election. It's the city's fault, in other words, if you end up paying 10 cents per $100 for your retooled health care system. But that's just speculation. It's not guesswork, though, to feel that the financial state of the local public health system is so bad – and has been for so long – that, if the district has any intention of truly meeting local needs, we'll be paying 10 cents or more soon enough.
More pressing, though, is the need to expose the flaw in the family metaphor: We are the parents here. The city and county are not separating spouses fighting over the kids; they are the kids, forced to share a room (the emergency room) and handling this burden as kids often do. Regardless of who's right and wrong amid all the blaming and flaming, we as citizens should be troubled, if not terrified, that right now, years into the process of building a hospital district, long past the point of no return, the city and county are still so far from mutual agreement on such basic details, and trust each other so little. If the kids don't start playing nice – as we move into a new election cycle – it may be time to start knocking heads together. 
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