Does Taxing Peacehealth Solve the Problem?

The COB accepted public comment on Agenda Bill 20388, to hear the public’s opinion on the Bellingham City Council’s proposal to:

Healthcare_Symbol Subject: Public Hearing on proposed ordinance repealing the B&O tax exemption for nonprofit religious healthcare providers and adopting healthcare-specific deductions and exemptions contained in the Washington State B&O tax code Summary Statement: On April 21, 2014, Council directed staff to hold a Public Hearing on changes to the
Bellingham Municipal Code that eliminates the current B&O tax exemption for nonprofit religious healthcare providers and adopts healthcare specific deductions and exemptions contained in the Washington State B&O tax code.
Previous Council Action: Council work sessions July 15, 2013, August 12, 2013, November 4, 2013, January 27,
2014, and April 21, 2014.
Fiscal Impact: Repealing the B&O tax exemption may result in an increase in General Fund revenue of up to $1,200,000 annually.
Funding Source: General Fund

Many private medical practices and clinics have been absorbed into the Peacehealth umbrella due to the changing landscape of health care delivery, costs of operations and reimbursement rates. The last blow to the City of Bellingham’s business and occupation tax structure was when Madrona Medical joined with Peacehealth. Madrona Medical apparently was left with two choices; join Peacehealth’s network where it’s doctors would essentially become “employee’s” of Peacehealth, or close their doors.Peacehealth.png

My question in all of this is this. “Will removal of Peacehealth’s tax exempt status solve the City of Bellingham’s reduced tax revenues?” Peacehealth is the only hospital in Whatcom County and with the Affordable Care Act, it is unlikely that Whatcom County will qualify for a new hospital unless we experience dramatic growth. There is Skagit Valley Hospital in Mt. Vernon, WA, which is within a reasonable distance to make it a viable alternative to receive medical services, but Peacehealth is a much larger facility which has brought a high level of skilled physicians and services directly to Whatcom County. If private, for profit Medical Clinics and practices are joining Peacehealth or closing their business, isn’t that the question the City Council needs answered? “What is the systemic cause to the flight from private practice, and what needs to change to stem that flight or attract new private medical practitioners?”

There were a lot of people who showed up to share their concerns with the Bellingham City Council’s, Agenda Bill 20388 to revoke Peacehealth’s tax exemption. It’s now up to the Bellingham City Council to absorb everything the public said, and weigh it against the recapturing of lost tax revenues for the City’s General Fund. One commenter at the public hearing has given me permission to publish his letter.  ~ Kris Halterman

Ron Buchinski, Executive Director of Lighthouse Mission Ministries had this to say at the public hearing.

I’m Ron Buchinski, Executive Director of Lighthouse Mission Ministries in Bellingham. I have served in Bellingham 9 1/2 years and have worked daily with the homeless in three communities for twenty-seven years.

Last year, our Mission’s 90th in Bellingham, we provided over 53,000 emergency nights of lodging and 143,000 meals to those who requested assistance. Additionally the two medical clinics we sponsor served over 1,000 walk-ins. We charged no fees and received no United Way funding, or housing levy funds from the City of Bellingham by choice, while paying thousands of dollars in fees monthly to the City of Bellingham to provide these compassionate services. I know that the cash value to this community of these essential services is millions of dollars that are voluntarily funded by the good people of Whatcom County.

We could not provide many of the services we provide to Bellingham without the selfless support of Peacehealth St. Joseph Medical Center. I am thankful everyday not only for the quality of our local hospital, but also for the fact that every day our staff and guests don’t have to commute to the closest hospital, forty-miles away.

We house many mentally ill men and women every night as well as two respite shelter individual (need professional health assistance but not in a hospital) every night. Daily, these services invariably involve our friends at Peacehealth St. Joseph Medical Center partnering with us as we provide housing and various maintenance to keep these troubled guests off the streets, out of jail or out of the coroner’s morgue—not to mention the incredible liability and risk involved in serving these guests. Peacehealth St. Joseph Medical Center receives no funding for hundreds of people like this that they serve each month. The average mental health admission to a hospital in Washington State averages a cost of $20k. Peacehealth St. Joseph Medical Center’s unfunded services last year, “in the Name of Christ,” was millions—millions, millions, millions of dollars!

I respect this Council and your service. One of you served at Lighthouse Mission with distinction. In years past I have worked closely with City Councils. My experience tells me this is not a legal issue. This is not a money issue either—God help us all if we are just “bottom line” people tonight. This discussion tonight is about all of us doing what’s right by an essential institution in our community, county and region. I hope you’ll support our Mayor’s recommendation regarding Peacehealth St. Joseph Medical Center’s tax obligation to Bellingham.


Ron Buchinski, Exec. Dir.

Lighthouse Mission MinistriesLighthouse_Mission_Ministries

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