Cars and public hospitals don't have much in common unless you live in Washington state.
Voters there went to the polls Nov. 2 and repealed a 62-year-old annual car tax. In so doing, they potentially dealt a blow to the state's public hospitals.
The successful ballot measure, called Initiative 695, not only eliminated the state's motor vehicle excise tax but also allows voters to approve any new taxes, fees or "monetary charge" the government imposes. The measure passed with 58% of the vote.
That means the broadly worded measure could significantly affect the state's 43 public hospital districts, since they are quasi-governmental agencies that can levy property taxes.
The Washington State Hospital Association, which opposed the ballot measure, fears the change will send public hospitals scurrying to the voters for any charge-not just property taxes-they want to increase.
"We believe that goes for all of their charges that would be included in their charge master," including a surgical sponge, a bed pan or a cup of coffee in a hospital-owned cafeteria, said Andy Davidson, vice president of government and public affairs at the hospital association.
But Tim Eyman, who sells watches in Mukilteo, Wash., and sponsored the grass-roots initiative, said the measure was not intended to send public hospitals running to the voters every time they want to raise the price of aspirin.
"We will not complain if they (raise the price of aspirin)," Eyman said.
He said the initiative is aimed at the more broad-based taxes and fees governments impose, such as property taxes, license fees, sales taxes and permit fees. The measure was not aimed specifically at hospitals.
"The best part of (Initiative) 695 is the fact that it gives government entities and these public agencies a hurdle they have to get over before taking more of people's money," Eyman said.
The courts will probably have to decide how far-reaching the initiative is.
Davidson said the state hospital association is mulling its legal and legislative options to clarify the issue.
"It's an absolute conundrum that we are in," Davidson said.
Still, C. Philip Sandifer, chief executive officer of 43-bed Island Health Northwest in Anacortes, Wash., wonders what will happen if public hospitals are forced to seek voter approval to pass along price increases from suppliers, such as pharmaceutical companies, and voters reject the increases.
"That's the question," Sandifer said.
He said property tax revenues account for less than 2% of his hospital's operating budget, which is $51 million for 2000.
If limits imposed by the initiative prove to be Draconian, one option would be to consider privatizing the hospital, Sandifer said.
Others fear the ballot measure, which stripped the state of $750 million in annual tax revenues, could ultimately mean a reduction in Medicaid reimbursement rates as the state tries to make up the missing tax dollars.