||| FROM JUDY SCOTT |||
This month, Orcas Island voters will be asked to approve an increase in the Orcas Island Health Care District levy to support our island’s healthcare system. I urge our community to come together and vote YES on this crucial measure.
Yes, any increase in property taxes can be difficult—but we are at a historic crossroads. Now is the time to take decisive action to safeguard and strengthen the essential services we all rely on, especially healthcare. Here are two key reasons why a YES vote on Proposition No. 1 is so important.
First, our Health Care District has never charged the maximum levy rate of $0.75 per $1,000 of assessed property value, as allowed under Washington state law. From the beginning, we opted for a much lower rate. Even with the proposed increase, the levy will remain below the legal maximum. The additional revenue will help the Health Care District keep pace with rising healthcare costs and expand services—something many of us have long hoped to see on the island.
Second, we must consider the warning signs coming from Washington, D.C. The federal government is moving to reduce support for long-established healthcare programs, including potential cuts to Medicare and Medicaid. These reductions would place a heavier financial burden on our local health care district. Rather than building out services, we may need these funds just to preserve what we already have. Either way, we must act now to protect and fortify our healthcare infrastructure.
Let it be remembered that in 2025, the voters of Orcas Island stood up and acted with foresight and responsibility. Let’s protect what matters. Vote YES on the health care levy increase – Proposition No. 1.
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Orcas Island needs and deserves at a minimum a medical clinic. We now have that, and it’s adequately funded at existing rates to continue as is for the next five years or so but with very limited capital improvements. There exists no levy cliff at this time.
The major cost driver in the proposed levy is a new contract with Island Health. It is in legal review and therefore not yet revealable to the general public. What is known is is it increases the Orcas Clinic’s annual payments from $1,022,000 to $1,200,000 a year beginning in 2026 with a minimum 5 percent (compounded each year) for each of the next 10 years for what is most likely current contract staffing. Given the recent inflation in health care costs, 5%+ a year increase may be reasonable. That’s a $15+ million contract (could be more if inflation increases above 5%) funded by Orcas Island taxpayers.
The reported 11,053 patient visits to the Orcas Clinic in 2024 results in virtually no revenue for the Orcas Clinic. Island Hospital does all the patient accounting and revenue collections. Question by financial geeks (I’m one of those rare critters) is how profitable is the Orcas Clinic to their mothership, Island Hospital? The existing contract requires a quarterly profit/loss statement be provided by Island Hospital to the Orcas Clinic. Sorry … non-disclosure agreement … can’t reveal that data. Since Island Hospital reported losses of millions of dollars due largely to COVID shutting down many profitable clinic operations, it begs the question if the Orcas Clinic is contributing to a reasonable profit level for Island Hospital. As a taxpayer, I simply don’t like financial non-disclosure agreements.
Two other issues that are complicating this levy ask is the Washington State legislature is very likely to increase the 1% plus new construction annual increase for government agencies, which would include the Orcas Hospital district to at least 3%, and Medicare and especially Medicaid funding is under heavy threat to be reduced under a conservative (I’m being politically polite) federal administration. The State action, if enacted, will most certainly increase all property taxes. Federal medical care funding is almost certainly not going to increase, and we don’t know what the contract with Island Health calls for if there are significant changes to federal health funding.
Finally, a brief comment on Orcas Clinic taxes mentioned in this article. The state maximum tax limit for hospital districts is $.75 per thousand of assessed valuation. Voters approved $.65 per thousand when the district was approved by voters in 2017. That’s now $.415 per thousand given largely the recent large increases in assessed property valuations on Orcas Island. The Orcas clinic commissioners correctly state have not used all of their possible levy money saving taxpayer dollars, but the banked levy amount is only $24,265 over the six years of tax collections … accurate talking point but pretty much financial white noise. That said, I believe the commissioners have done a respectable job managing the finances of the Orcas Clinic.
Yes, we must approve this needed increase, and I have a suggestion. When visitors to the island pay for their individual medical services through insurance or out-of-pocket costs, they do not contribute to the property tax levy that supports the clinic’s operations. This creates a distinction between residents who fund healthcare infrastructure through taxes and visitors who only pay for direct services received. It seems more fair to me if there was a way to have visitors pay an infrastructure fee, and wonder if this has been considered.