York Hospital reaches vital tax deal with Maine, averting closure threat
YORK — York Hospital announced Monday it has reached a deal with Gov. Janet Mills' administration regarding a proposed tax hike and the elimination of a tax break that hospital officials previously said would have led to the hospital's closure.
"After working over the past several months, York Hospital and the Mills administration have successfully reached an agreement regarding the administration’s hospital rate reform proposal," the hospital stated in a press release. "The agreement addresses supplemental payments and continued collaboration with the administration toward a transition plan that maintains York Hospital’s future financial health."
Details of the agreement reached were not released publicly.
York Hospital's statement went on to thank the Mills administration "for their willingness to work on this collaborative solution that will benefit the people of York County."
Jean Kolak, spokesperson for York Hospital, said no further information will be released until after the Maine Legislature votes on the budget.
The agreement comes after the state Department of Health and Human Services and the Maine Hospital Association announced in early February their $90 million investment in MaineCare. As part of this plan, however, taxes would be raised at all Maine hospitals, and York Hospital would, after five years, lose a multi-million-dollar tax exemption.
Previous story: York Hospital CEO pleads with lawmakers to ditch tax hike
The proposal was included in the state's supplemental budget. If it went through, York Hospital would have seen an estimated tax increase of $2 million a year and, after five years, would also lose about $5.6 million in annual tax exemptions that have been in place since the late 1990s.
York Hospital officials pleaded with lawmakers to reconsider the move, saying the loss of that amount of money would lead to the hospital's closure.
State Sen. Mark Lawrence, D-York, who advocated on behalf of the hospital, said he was pleased an agreement was reached.
"After we built support in the Legislature for York Hospital and made it clear to the administration that we were going to see that it was in the budget, they agreed to negotiate," Lawrence said.
Lawrence said the administration, York Hospital and the state DHHS negotiated Sunday morning and "reached a resolution that York Hospital is very happy about."
The deal will be a part of the supplemental budget, which will be voted on by the Legislature in the next three days.
"I believe York Hospital, instead of the $5.6 million (in tax exemptions) they were going to get for five years, they will be getting $8 million a year," Lawrence said.
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Lawrence said there were other details but directed further questions to York Hospital CEO Patrick Taylor, who did not immediately return a call seeking comment.
"It will give York Hospital the resources it needs for the next five years, and at that time we will review it," Lawrence said. "I'm just pleased this worked out so well."
York Hospital is the only hospital in the state that receives such a tax exemption. Maine DHHS had said York Hospital has "a unique grandfathered funding structure" and wanted it to be "consistent with all other acute care hospitals in the state."
Lawrence said York Hospital received its tax exemptions because of its location on the southern Maine border and the region's massive increase in people requiring healthcare services during the summer tourist season.
"The exemptions were put in place because York Hospital services a large population in the summer when tourists and snowbirds are in the area and a much smaller population in the off-season," he said. "This helped the hospital hold sufficient staffing through the winter months, so they'd be ready for the crush of summer. It also allowed the hospital to hold strong against HCA and Wentworth-Douglass."
HCA owns Portsmouth Regional Hospital in New Hampshire, and Wentworth-Douglass Hospital of Dover, New Hampshire, is owned by Mass General Brigham. Both are a short drive from York.
"It's a unique situation, and that is what we were trying to get across," Lawrence said. "I'm glad the administration was finally willing to sit down and negotiate and help us find a unique solution to York Hospital."
Lawrence said he believes the deal reached would still have the exemption end after five years.
"But the reality is each Legislature would have to consider that, and they would have five years to find a solution to that," Lawrence said.
This article originally appeared on Portsmouth Herald: York Hospital reaches vital tax deal, averting closure threat
