Voters in rural Calif. county that has requested state bailout decide on hospital parcel tax

Voters decide future of cash-strapped Calif county

SACRAMENTO, Calif. — The fate of a rural hospital — and perhaps the solvency of the county that runs it — hang in the balance Tuesday in California’s far northeastern corner.

Modoc County will release results of a mail-in election in which its 5,667 registered voters will decide whether to impose a $195-a-year parcel tax to keep their struggling hospital afloat.

The hospital’s operating costs have overwhelmed county finances, leading local officials to request a $12.5 million loan from the state. State officials are still mulling the request.

The county also has considered bankruptcy, but supervisors have said that option is a last resort.

If the parcel tax fails, its supporters fear the end of urgent medical care in their community, nearly 400 miles northeast of San Francisco.

“If we don’t keep this hospital, then we have no emergency room and we have no ambulance service,” said 72-year-old Pat Cantrall, a county supervisor and volunteer emergency medical technician who has worked or volunteered at the hospital for more than 60 years. “If this doesn’t pass, I’m afraid we’re done for.”

The nearest emergency room is more than 20 miles away, over mountain roads that are often closed due to snowy conditions in winter. Others are more than an hour’s drive away.

The Modoc Medical Center has been reducing staff and services to deal with its budget deficit, including halting surgeries and baby deliveries, said Monica Derner, interim chief operating officer.

The county’s dire fiscal situation stems from its practice of improperly borrowing from county funds intended for education, transportation and other purposes to pay hospital expenses. A review by the state controller’s office determined the county had to repay those funds immediately.

The hospital has been in the red for more than a decade, losing between $600,000 and $2.8 million annually in recent years, and the county has racked up more than $12.5 million in debt trying to keep it afloat.

Modoc County requested a loan from the state when it was told it had to repay the money. State finance officials are considering the request, but no final decision has been made.

Tom Dresslar, a spokesman in the state treasurer’s office, said the loan request is unusual, but it’s in the state’s interest to prevent the county from falling into bankruptcy. He said state officials want assurances Modoc County will be able to repay the loan.

Voters are deciding two measures: One would create an independent health care district that would be run by a board of directors separate from the county. The other would assess the parcel tax on land owners who live in the hospital district, generating $3.1 million a year to fund the hospital.

Opponents say a tax increase is the last thing residents need, especially at a time when people are struggling to make ends meet.

“I just want this county to survive, and I think that basically the people are looking at the hospital and not looking at the overall financial situation of the county itself,” said Doug Knox, a retired rancher and veteran.

He has been running ads against the measures on local radio stations. Knox said he believes that if the parcel tax passes, frustrated land owners will give up their land, leading to even less tax revenue coming to the county.