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Jonesboro leaders say ‘No’ to hospital debt

Council members say they are not responsible for county’s obligations

Billy Powell

Billy Powell

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Joy Day

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Randy Segner

JONESBORO — The Jonesboro City Council will not come to the aid of Southern Regional Medical Center.

Council members considered the possibility of giving up part of their proceeds from the proposed 2015 Special Purpose Local Option Sales Tax to pay off debt the county commission will take on to bail the hospital out.

Hospital officials have repeatedly said a federal mandate that hospitals must treat emergency room patients, regardless of whether they can pay their medical bills, has caused them to operate at an annual deficit. The county is expected to take out bonds to help cover that deficit, and then use $50 million in proposed SPLOST funds to pay off the debt.

But Jonesboro leaders don’t see it as the city’s obligation. Councilman Billy Powell said residents of the city will have to pay for what he called a “bailout of the hospital” if the money comes solely from the county’s share of SPLOST proceeds. Asking the city to give up some of its share is akin to taxing Jonesboro residents twice to pay off the debt, he said.

“If we pay zero from the city, we’re doing nothing less or nothing more than the person who lives in Lake Spivey,” Powell said. “The money is still there and it’s still coming, but city of Jonesboro is not liable for the county’s debt.”

The proposed SPLOST is expected to go before voters for approval May 20, and county commissioners were expected to consider their project list Tuesday night. County and hospital officials have painted the vote as a referendum on whether residents want a hospital in their community.

Commissioners have said the cities should give up some of their SPLOST proceeds to fund the hospital. However, Powell’s comments echoed the sentiments of several council members on the subject. Councilman Randy Segner pointed out that giving the hospital money is not enough by itself to fix the hospital’s financial issues.

Four years ago, the county backed $40 million in bonds to help the hospital out of a tough financial situation and Segner expressed concerns that Southern Regional could end up in this situation again before the decade ends.

“The problem across the United States is that indigent care is being done in emergency rooms across the country as primary care,” Segner said.

As for the bonds, he said, “it’s probably not going to solve the problem, so in five years or however many years this thing is going to last, they’re probably going to come back again [and ask for more money].”

Adding another layer to the city’s reluctance, Jonesboro Mayor Joy Day said, is the fact that whoever agrees to payback the bonds is required to keep paying them off even if the hospital closes because of its financial problems.

Day said a key reason why council members don’t want to sign on to help pay off the bonds stems from cuts they’ve already had to endure to their expected SPLOST proceeds.

The county has opted to split the SPLOST proceeds between itself and the seven cities based on population rather than Local Option Sales Tax-based split leaders had originally agreed to, Day said. She said that change has meant Jonesboro’s share of the SPLOST has dropped by about half of what city officials originally expected.

“We operated for two months thinking we were going to get $8 million and now we’re getting $4-point-something [million],” said Day.