Saturday, October 03, 2009

Ryerson Defends Wishard Referendum Editorial: No Name Calling

Star editor Dennis Ryerson took strong offense to the strong language I used in a blog post last weekend responding to the paper's editorial endorsement of a more than $700 million bond referendum to construct a new hospital to replace Wishard Hospital. I explained that the editorial simply lied to its readers when it suggested the question involved no new tax increases. "Again, no tax increase is being presented on Nov. 3," the editorial read in urging voters to approve the referendum. "I fully expected disagreement with our point of view," Ryerson writes on the Sunday editorial page. "I didn't expect to be called a liar, which is what some blogosphere commentators promptly labeled us," he writes. "If at the end of the day your argument is reduced to casting aspersions on your opponent, then you must not have much of an argument," he opines. He goes on to worry that this "small minority" might prevail. "But with a low voter turnout expected in November, a small minority might be able to prevail against the Wishard plan," he suggests. He adds, "Besides, I just don't like being called a liar."

Ryerson takes up an entire column length of the paper explaining why his editorial did not mislead voters on what the referendum question is about. I would note that he makes no mention of his own newspaper's earlier criticism of the referendum language crafted by the Health & Hospital Corporation that makes no mention of how much money it intends to borrow through bond issues, how Marion County property taxpayers are being required to pledge new property tax revenues to ensure repayment of those bonds or even the simple fact that the referendum approves the construction of a new hospital. Remarkably, Ryerson suggests taxpayers won't pay for any of the construction costs. "All in all, the burden to pay for this will fall on Wishard, not on taxpayers, which is why voters in November should approve the deal," he claims. Huh? Is Wishard not a county-owned hospital funded almost entirely by public tax dollars? Why is it that of the four largest counties in Indiana, Marion County is the only one that still supports and operates a county-owned hospital. Only about a third of the counties in the state still operate county-owned hospitals. Is it not possible for all of the other new hospitals built or expanded in the Indianapolis area in the last few years to provide those services? Has Ryerson failed to do his homework?

Ryerson particularly takes issue with my criticism, albeit never by name, that the editorial misleads his readers about future property tax increases to pay for the new hospital. "Wishard could have used a type of financing called revenue bonds to pay for the hospital," he says. "But that option would have required significantly higher interest payments totalling hundreds of millions of dollars." "Instead, hospital officials decided to use general obligation bonds." He concedes, "If other sources can't cover the costs of those bonds, then taxes would go up." Ryerson misses my whole point that HHC can't issue revenue bonds because the source of revenues it is relying upon to cover the costs of the bonds aren't reliable and would never be deemed an adequate pledge by potential bond buyers. Ryerson describes these revenues as "hospital revenues." They are not. The HHC has made clear it is relying on revenues from a relatively new line of business--nursing homes. If this was a reliable revenue source, the HHC could sell bonds for a rate comparable to what it sells general obligation bonds contrary to Ryerson's assertion. It is the credit worthiness rating assigned to the government entity by bond analysts that have more to do with the interest rate of the bonds than whether they are general obligation or revenue bonds. The State of Indiana had no trouble getting a good bond rating and corresponding low interest rate on the Lucas Oil Stadium bonds that are backed by food and beverage tax revenues.

The HHC leases nursing homes across the state from a private company, which it in turn leases them to American Senior Communities to operate. By creating the illusion of a nursing home owned and operated by a county hospital, the HHC is able to get Medicaid reimbursements at approximately double the rate that other nursing homes in Indiana receive to provide the same type of services. I believe this is a scam on the federal government, and that someone within the federal government will eventually catch on and put an end to it. When that happens, all hell breaks loose. If Ryerson was doing his job as a newspaper editor, he would make sure his readers understood all of the nuances of how this project will be financed. Instead, he is only presenting the one side of the proponents, who have been misleading the public about this project from the moment it snuck this referendum question into the state budget in the dark of the night during the special legislative session.

Ryerson's poor excuse for accepting the HHC's arguments that it can fund this hospital project without new taxes is that it has "convinced the Indianapolis Chamber of Commerce and others, that hospital revenues are more than sufficient to cover the debt . . . " This would be the same Chamber of Commerce that has backed every tax and spend scheme contrived by local officials in recent years. As long as the tax burden falls on the little people and not the big businesses it represents, the Chamber of Commerce is all for higher taxes, borrowing and spending by local governments. We fully expected the Chamber to back this referendum question; we were just hoping that the Star would exercise a little fair and balanced reporting on it. That is something we obviously are not going to get on this issue.

9 comments:

Paul K. Ogden said...

Actually Dorson and the Indianapolis Chamber is so out of touch that the chamber will even support taxes on their own members - they are supporting the increases in the hotel tax and the car rental tax, for example. The Chamber seems to have forgotten its mission.

dcrutch said...

This is in the same ballpark as your teenager coming to you about a car they want to buy. They have a little "cash flow" problem and need you to co-sign.

We've still got double digit unemployment, trillions in unfunded obligations of existent medical programs, not enough money to adequately staff our local police department, major state-wide education funding issues ahead, and we're asking taxpayers to pay more if the cash flow "solution" doesn't work out? This solution not only looks like it came from the car dealer selling your kid the car, but appears exactly when another local hospital is having to pay back millions in a similar "cash flow", all while the Federal government is temporarily preoccupied with stopping fraudulent billing to justify shoving their own 1000page medical ambitions down our throat (that won't apply to them).

With due respect to genuine "reform" and human "compassion", they are limitless concepts in a world with only so many dollars.

How about limiting the medical care of non-citizens? How about definitive expectations of parental responsibility with a hard time limit on attempted biological reunifications? How about being straight with the taxpayer and getting the bonds that are required when the "revenue flow" is suspect? How about expecting everyone that enters the hospital for care has to pay at least something? How about pricing up front so we start to get to the heart of where the costs come from and who's paying them? How about an endorsement for this project besides a fox guarding the hen house like the Chamber of Commerce? Was there a public clamoring before this was "slipped into the night" by the legistlature? I read the paper a lot. If it was there, I missed it.

There's nothing wrong with better schools, hospitals, highways, public safety, or a zillion items we and our government would like to have. Unfortunately, we're no longer a deep-pocketed, invulnerable economic titan.

Be up front with us and you've got a better chance.

Advance Indiana said...

The Chamber supported the 65% increase in the local option income tax as well, Paul.

Downtown Indy said...

The best way we can help Matt Gutwein is to vote no on next month's referendum.

He tells us they will pay for it all by themselves (even though it's really using money they suck out of the Medicare system).

We need to vote down the referendum to ensure he can't renege on that promise. Voting no won't cause the project to slow or affect their sources of revenue. Matt Gutwein has told us so.

VOTE NO!!!

Downtown Indy said...

Reality vs. Matt Gutwein
Waves Of New Funding Cuts Imperil US Nursing Homes

"A Medicare rate adjustment that cuts an estimated $16 billion in nursing home funding over the next 10 years was enacted at week's end by the federal Centers for Medicare and Medicaid Services -- on top of state-level cuts or flat-funding that already had the industry reeling.

"And Congress is debating slashing billions more in Medicare funding as part of health care reform.

"Add it all up, and the nursing home industry is headed for a crisis, industry officials say."

dcrutch said...

Ever see a cat chase it's tail? We've got governmental layer after layer of commitments, assurances, promises, and mandates- manifested in all manner of entitlements by politicians of both parties. That's how they got re-elected. By us.

When most of your spending is in entitlements, where will you be reducing spending first? Which tail will you be chasing first? Which class will you set loose upon the other?

Inefficiency and corruption are one thing. Are we to also wholly reduce Medicare funding across-the-board before we conduct more exhaustive means-testing? Before we reduce all manner of infrastructure benefits that go to non-citizens? Before we make sure a single parent and a check are actally raising a child with a decent shot at life, instead of another individual headed to the tax rolls?

Is it too much to ask to clean-up our act before the Medicare cuts that come after rooting-out corruption? Doesn't the Medicare class deserve credit for being less apt to pepetually have their hand out in their younger years?

It's no longer as simple as let's just pull out of Afghanistan.

Stop Indiana said...

How much public "obligation" can they teeter on the roofs of private citizens; eminent devaluation excused as "good policy?"

HOOSIERS FOR FAIR TAX said...

Gary? Bob Grand said no one reads the blogs.

Advance Indiana said...

Matt Gutwein told McANA he doesn't read the blogs either.