Knox County converting ambulance tax, taking 3/8 of health tax and asking library for same in order to save hospital

The Knox County Fiscal Court and the Knox County Board of Health reached a deal Monday to aid its debt-laden county hospital’s recovery from bankruptcy by diverting, at least temporarily, 37.5 percent of local health tax revenue to the hospital, asking the local library to do likewise and converting an ambulance tax into a hospital tax.

The proposed agreement is “revenue neutral” and would not create any additional tax for Knox County residents while allowing the Knox County Hospital in Barbourville to stay open, writes Jeff Noble of The Times-Tribune in Corbin.

To save the hospital, the hospital board needs a tax of about 8 cents per $100 worth of property, County Judge-Executive J.M. Hall said. The deal would convert a 5-cent ambulance tax to a hospital tax, and the county health board has agreed to shift 1.5 cents of its 4-cent tax to the hospital. The library board is considering similar action, which would make up the total 8 cents, Hall told Noble.

Health Department Director Susan Liford said the two-year deal with the health board will begin in January 2014 and will be re-evaluated at the end of that period. The health department will be diverting $300,000 to $400,000 a year to the hospital, Noble reports.

“The board felt like we needed to help the hospital, and they were very adamant they did not want to put the health department in jeopardy and have no one here lose their jobs,” Liford told Noble. “I think it’s the moral thing to do. And we need our hospital.”

The hospital has a debt estimated at $23 million, though the Knox County Fiscal Court purchased it out of bankruptcy by in 2004 for just $7.2 million, according to documents analyzed by the Barbourville Mountain Advocate, Knox County’s weekly newspaper. Last July, the fiscal court took over hospital operations of the hospital, borrowing $6 million to fund them, after the former owners filed Chapter 11 bankruptcy. (Mountain Advocate graphic; click on it for larger version)

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