Tuesday, February 6, 2018

Council Budget Committee recommends increase in Nashville General Hospital. Funds $17.1 instead of the mayor's $13.2.

by Rod Williams - Mayor Barry proposed giving General Hospital an additional $13.2 million and last night the Metro's Budget and Finance Committee by vote of 12 to 0 upped that amount to $17.1 million. This is still short of the additional $19.7 million the hospital says it needs.

The extra $3.9 is coming from the city's "undesignated fund balance," which serves as a rainy day fund for the city. Spending this money will reduce that fund balance to less than five percent of the city's general operating budget. This is irresponsible and will be the first time thus has happened in nearly a decade. With the city awash in money, this should not be happening. Our current budget is $2.2 billion dollars which is $122 million more than the year prior. The size of the reserve fund is one of the factors bonding agency look at in giving the city a bonding rating. A drop in our bond rating could be very costly to the city. Look for a tax increase next year.

If this additional $17.1 million is not enough for General, I do not know where the city will get the rest of the money. We could dip even deeper into the undesignated fund balance, but surely the Council would not be even more financially irresponsible.  There are various other funds the council could dip into, a little here and a little there, and by delaying a planned hiring or expansion or facility opening, here and there, the the city could find the money without a lot of pain but that is not a good practice. The city could take some money from departments and then let the department use the 4% fund to purchase equipment instead of spending the money out of their budgeted amount as originally planned. This tactic sometimes involves stretching the definition of what the 4% fund is to be used for, however. I have observed the Council a long time and have seen this "robbing Peter to pay Paul" used successfully in the past. It is doable but not a good practice. Look for a tax increase next year.

I think the Council should have gotten behind the mayor and given her some backbone to go ahead and convert General to an out patient facility, but they did not.  Since the Council does not have the fortitude to do the right thing and close General, then they might as well give it the money it request. If we are going to keep General unchanged, they must pay their bills. We will then have to increase taxes or cut spending going forward next year. Of course a "cut" really means not an increase so some departments will get less of an increase than they otherwise would have. It is a fact just as it is in a household budget, if you spend money on one thing, then you can't spend it on something else.

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