Unraveling the Fiction: Taxes Can Support Pension Plan

During Monday’s Board of Supervisors meeting, John McKay gave this response to a retiree:

“We cannot pass a tax increase to support the pension plan. We can pass one to help the hospital in some ways, but we can’t raise taxes to support” a private plan.

We’ve already unraveled McKay’s fiction that the Singing River pension is a “private plan.” Let’s examine his next fiction, that taxes can’t be raised to support the pension. McKay did admit that “taxes can be raised to help the hospital in some ways.”  Which are those ways?

Guaranteed Payments to Wall Street

Singing River, like many publicly owned entities,  issues bonds to finance construction and expansion projects. The county “co-signs” these bonds, pledging up to five mills ($8 -$9 million, the statutory limit) in case SRHS can’t make the payments. This helps SRHS get more favorable deals terms; they can borrow more at a lower interest rate.

If the hospital can’t afford to pay the Wall Street bankers, the Board of Supervisors agreed to raise taxes in order to cover the payments. If the hospital can’t afford to pay employees their pensions, the Board of Supervisors has agreed to do nothing.

Indigent Care

The Board of Supervisors can  levy a tax to cover the hospital’s costs for providing uncompensated care. Trustee Scott Taylor informs us the hospital’s actual cost to provide this care was roughly $25 million. Taylor, who was appointed by McKay, is in support of a tax increase to help stabilize Singing River’s finances.

Any Reason it Desires

The supervisors are vested with the powers to raise taxes and allocate that revenue. They do it every year. If they choose to give Singing River an extra $8 million a year to stabilize finances, that is perfectly within their powers.  The county is authorized by state law to tax up five mills to support hospital operations.

Taxes Already Support Special Interests

The Board of Supervisors stance seems to be that the retirees are a special interest, who are holding their hands out for a tax increase.  Indeed, the county already spends $1 million a year of tax payer money to support the Trent Lott International Airport. Few in Jackson County have ever used the airport, nor have the wealth necessary to have use of it.

The county also spends taxpayer money on the Small Craft Harbor. The harbor has 165 slips that are leased to a few working fishermen and a lot of wealthy pleasure craft owners. Few in the county derive benefit from this facility.

Jackson County has set aside $2.7 million of taxpayer money to support the library. The library serves thousands more citizens than the airport and harbor combined. The BoS feels that the library serves a public need worth $2.7 annually. Certainly, the hospital could be considered to serve a public need.

Taxes Already Support County Owned Entities

Singing River is a separate legal entity from, but owned by, Jackson County, as is the Jackson County Port Authority. Though the hospital and the port have the ability to be self-sustaining, the county has allocated 1 mill ($1.8 million) annually  to subsidize operations of the port.

Everyone Goes to the Hospital

The hospital and its ability to meet financial obligations is not a special interest. The roughly 2,400 people whose retirements are affected did nothing to deserve the desertion of support by the Board of Supervisors. While the BoS may not be able to raise taxes to directly fund the pension plan, they can raise taxes to support the operations and finances of Singing River. This will free up cash to refund the pension plan. Everyone in the county goes to the hospital at some point. Since the taxpayers are already paying for an airport, port, and harbor they’ll never use, would they object to financial support for a hospital they do use?

If the Board of Supervisors is willing to send $8 million to Wall Street to bail out bankers, they should be willing to send something to Hospital Street to bail out Singing River.

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