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AUSTIN, Texas – Anyone who thinks state senators pay no attention to legislation that only impacts other parts of Texas should think again.

At a Senate Committee on Intergovernmental Relations hearing, state Sens. Sylvia Garcia, D-Houston, and Paul Bettencourt, R-Houston, proved they do. After listening intently to legislation from state Sen. Juan Hinojosa that deals with a healthcare district for Hidalgo County, the two senators made telling contributions.

State Senator Juan Hinojosa, D-McAllen.
State Senator Juan Hinojosa, D-McAllen.

They noted that Hinojosa’s bill was similar to legislation they heard the week before that dealt with a healthcare district for Cameron County. The only difference Garcia and Bettencourt could see was that the Cameron County legislation included a tax swap provision. In the Cameron County legislation, any increased taxes raised by the healthcare district for indigent healthcare would be offset by a tax reduction by Cameron County.

This is how the dialogue went at the hearing:

Garcia: “I notice this is a mirror image of the Cameron County version that we heard, I guess last week. Except that this one does not provide for a county tax decrease proportionate to the healthcare district increase. Is there a reason for the difference between this one and the other one?”

Hinojosa: “Senator Garcia, we are considering that – the first time we tried it we were informed we couldn’t do it by legislation. We are trying to revisit this issue. I can tell you we passed a resolution in the House and the Senate for the County of Hidalgo to reduce its tax rate by the same amount by which the tax rate was transferred and swapped to the healthcare district.”

Garcia: “Are you going to try to put this in as an amendment or do it later?”

State Senator Sylvia Garcia, D-Houston.
State Senator Sylvia Garcia, D-Houston.

Hinojosa: “We are working on the language. I will add that right now counties have to set aside eight percent of their budget for indigent healthcare. What we are doing with this hospital district, now called a healthcare district, is to transfer those responsibilities to a healthcare district. It becomes a swap. But, the county is not able to draw down 1115 Waiver monies like a healthcare district.”

Garcia: “I am trying to support both (pieces of legislation – Cameron and Hidalgo).”

Sen. Bettencourt agreed with Garcia. He said the legislation is all the better for having a cap that prevents a future Hidalgo County Healthcare District from raising taxes above 25 cents per $100 property valuation. When leaders in Hidalgo County put the issue of hospital district to voters last November it was voted down narrowly. Many analysts believe the cap in place at that time, 75 cents per $100 property valuation was a contributing factor to the “no” vote.

“This is a much better bill with the cap,” Bettencourt said. “I would second Senator Garcia’s comments about making the swap plain and clear for taxpayers. I would suspect that would make a major difference in the vote total outcome.”

State Rep. R.D. ‘Bobby’ Guerra testified at the Senate committee hearing in favor of Hinojosa’s legislation. Guerra, D-McAllen, is carrying a companion bill in the House.

“This is a taxpayer protection bill. This bill does not create a hospital district. It is up to the voters of Hidalgo County to make that decision. It (a healthcare district) is so badly needed but it is up to the voters,” Guerra said.

Bettencourt responded: “I would just urge you all to consider the Cameron County language. That would make you have a winning combination.”

Guerra replied: “We are working on that. There are some legal issues that we have to work through. We want to make sure we have a good bill and not have one that creates more of a problem in passing it.”

No vote was taken at the Senate committee hearing. However, the very next day, the committee chairman, state Sen. Eddie Lucio, D-Brownsville, called an impromptu meeting of the committee at his desk on the floor of the Senate to vote out Hinojosa’s bill. The bill was voted out of committee on a 6-0 vote with one member, Sen. Donna Campbell, R-New Braunfels, absent.

Before the vote was taken, Hinojosa made this comment: “It is my intention to add an amendment on the Senate floor that will have an equal reduction of taxes by the county, a cost shift to the healthcare district. It is a trade off on the taxes that right now are being charged or collected by the county for indigent healthcare.”

Bettencourt asked: “Is it similar to the Cameron County bill?” Hinojosa replied: “Yes.” Bettencourt said: “We appreciate that.” Garcia then made the motion to pass Senate Bill 626 out of committee.

State Senator Paul Bettencourt, R-Houston.
State Senator Paul Bettencourt, R-Houston.

The day before, Hinojosa, D-McAllen, had made the case for Senate Bill 626. This is what he said at the Senate Committee on Intergovernmental Relations hearing:

“Senate Bill 626 is really legislation to protect our taxpayers in Hidalgo County. This bill is a local bill that will amend a current statute that was passed last session. This bill will provide safeguards and protections to our local taxpayers if in Hidalgo County a healthcare district is created in the future with voter approval. This is critical for our families in the Rio Grande Valley to provide resources to support a medical school, to cover our community healthcare needs for both the insured and the uninsured and to decrease the tax burden on our county taxpayers.

“The Rio Grande Valley has some of the highest rates of uninsured individuals and among the worst healthcare outcomes in the nation. In Hidalgo County almost 40 percent of residents are uninsured compared to 24 percent statewide. Last session, enabling legislation was passed to create a Hidalgo County Hospital District with voter approval. However, to respond to feedback we received from voters, elected officials and community leaders about the hospital district, we worked together to draft Senate Bill 626 and put safeguards in place to assure the most protections for our property taxpayers. The healthcare district will allow Hidalgo County to improve our current indigent care program as well as leverage federal funds through the 1115 Waiver.

“If I just might add, and this is a point to make, the federal government has now changed the 1115 Waiver so that counties that do not have a hospital district or healthcare district can no longer draw down federal matching funds, two or three to one. That means that those costs of healthcare will be paid by local taxpayers. So, this on a long term basis will decrease the property tax burden on our local property tax payers.

“I will also tell you that the changes we made last session, the bill we are trying to amend has a 75 cents per $100 tax rate cap which was in the constitution. This bill changes that to a 25 cents per $100 valuation cap. And, any tax proposals have to be approved by the county commissioners. That means we will have proper oversight and veto power over any proposal by the healthcare district.

“The healthcare district in addition, under this legislation, will provide for all the proper tax exemptions under homestead, to veterans and disabled peoples and to those who are over 65 or over.

“Another key aspect of the healthcare bill is that we are in the process of having a new medical school in the Rio Grande Valley. In all other parts of the state except one, a healthcare district is very crucial to the development and full growth of a medical school. The medical school is so key that for us in the Rio Grande Valley, it will create thousands of new jobs. It will attract many health-related businesses to the Valley. In addition to that it will bring in much needed healthcare and doctors to an area that is grossly under-served.”

Among those who testified in favor of SB 626 at the hearing were Edinburg Mayor Richard Garcia, McAllen Mayor Jim Darling, Doctors Hospital at Renaissance CEO Israel Rocha, and veterans’ advocate Felix Rodriguez, a former commander of Veterans of Foreign Wars in the Rio Grande Valley.

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