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.