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House panel approves hospital debt plan

House panel approves hospital debt plan

Dustin Hurst
February 17, 2010
Dustin Hurst
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February 17, 2010

The House State Affairs Committee voted Wednesday to approve a plan that, ultimately, could allow public hospitals and other public medical facilities to go into long-term debt.

The measure, sponsored by Rep. Fred Wood, R-Burley, wouldn't automatically allow medical facilities to enter into debt upon passage by the Legislature and approval of the governor.  If passed, the proposal would be placed on the general election ballot in November for voter approval.  The cost to the state of doing so would be between $35,000 and $40,000.

Public facilities could enter into debt to purchase new technological equipment, construct new facilities, or purchase new property for the purposes of medical care.  Generally, many facilities are owned by counties and receive some tax dollars, but the legislation prevents them from using tax money to pay off debt.

In the introductory hearing on the bill, Wood said that allowing hospitals to incur debt for major projects gives them the flexibility to acquire new technologies quickly without voter approval.   He also touted the bill's job creation function, saying that if hospitals can construct new buildings or purchase new equipment, workers are needed to do the work.

The legislation would overturn a 2006 decision by the Idaho Supreme Court, which requires public facilities to approach voters concerning long-term municipal debt.  The case was fought over a proposed expansion of a parking garage at the Boise Airport in which justices ruled that according to the state constitution, all debt for public municipals entities, including public medical facilities, airports, and electric companies, must be approved by voters.

Joe Morris, CEO of Kootenai Health, which operates Kootenai Medical Center in Coeur D'Alene, blasted the restriction as too limiting and said that as a result of the limitations, health insurance costs could rise in the state.  He also said that since 1972, when public medical centers were first allowed to incur debt, not one payment had been missed.

Lawmakers approved the measure, which will be sent to the House floor for approval.  If approved by the House and Senate, voters would see the debt question on their ballots in November.  Wood has similar bills before the Legislature which would clear the way for airports and electric entities to incur debt.

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