Sarasota Memorial board approves tax rate, $501 million budget

David Gulliver - posted 11 a.m. Tuesday, Sept. 22

The Sarasota Memorial Hospital board approved a tax rate increase and the 2010 budget in a brief hearing Monday.

The board passed the tax rate by a 7-1 vote, with Dr. Thomas Kelly opposed. Kelly left shortly after the vote, but has previously said he could not support a tax increase when the hospital was having a strong year financially. Board member Gerry Phillips, who also opposed the rate increase in preliminary hearings, was not present.

Board members voted 8-0 for the budget, which projects about $501 million in spending on salaries, benefits, supplies and other items. (For a detailed report on the SMH budget, click here.) There was no public comment on the tax rate or the budget.

The new tax rate, 1.0863 mills, is about 15 percent higher than last year's 0.941 mills. The board voted to accept the rollback rate, the millage that will generate the same revenue as last year. Because property values have fallen, that rollback rate is an increase over last year's rate, but most homeowners will see little or no change in their hospital tax bil. Property tax increases can require a supermajority vote, but not when in cases where the taxing authority is accepting a rollback amount. The hospital projects it will raise about $47 million.

Board President Dr. Marguerite Malone said she too considered the poor economy in her decision, but from the perspective of the community's needs.

"What we believe is that maintaining the 47 million is important in these dire economic times because we still provide services seven days a week, 365 days a year, and we can expect to be seeing more people who will require our services, people who may have lost their health insurance," she said.

In the board's monthly business meeting, earlier that day, members reviewed financial data for the first 11 months of fiscal 2009. The hospital was posting a 3.2 percent profit margin through the third quarter, and had a $25.2 million profit with one month left in the fiscal year, when including tax and investment income. The hospital loses money on its day-to-day operations.

Malone said the surplus was not like typical corporate profits, in that it goes to the hospital's cash reserves -- now about about $514 million. Wall Street credit rating firms have noted those reserves, and the board's willingness to raise taxes if needed, as the keys in their upgrades of the hospital's financial strength. Those upgrades led to lower interest rates when the hospital sold bonds, and should save about $1 million a year in interest, hospital Chief Financial Officer David Verinder said. The hospital also is spending about $86 million of reserves on its planned new bed tower.