Circuit Judge Tim Fox has cleared Pulaski County authorities of accusations that they failed to properly supervise $3.8 million in property tax revenue dedicated to Arkansas Children’s Hospital.
Since 1981, Pulaski County property owners have been paying 60 cents for every $1,000 of taxable property value annually to support the hospital. The hospital-maintenance tax collection has grown annually from $2.4 million in 2009 to $3.8 million for 2016.
Activist Dee Blakely of Mabelvale contended in a 2015 lawsuit that the county, which collects the tax for the hospital, has failed for years to properly oversee how the money was being used to make sure it was being spent to benefit county taxpayers.
For failing to properly account for the money, Blakely’s suit called for the county to be court-ordered to reimburse taxpayers for the past five years of the collection, more than $17 million.
County officials denied wrongdoing and stated that they had been complying with the terms of the 1980 vote that established the hospital tax to guarantee that all county children would have access to health care through Children’s Hospital.
The money once went directly to the hospital. But in 2001, Children’s Hospital directors had the county start putting the money into a state-administered Medicaid account. The fund is used to match federal Medicaid contributions that can generate a 3-to-1 return on the hospital tax collection.
County lawyers had argued that the lawsuit should be dismissed since there’s no evidence that any of the money was being misspent.
The lawsuit was the subject of a trial earlier this month, and in his ruling on the case released Thursday, Fox sided with the county and threw out the suit.
“The testimony was that every Pulaski County resident who presented for treatment was treated, regardless of their ability to pay. As a matter of law, this means, ‘that adequate medical care’ was made available ‘to all children residing in the county,’” the judge wrote. “The testimony was that a ‘substantial percentage’ of the [hospital] patients were Pulaski County residents, yet the Hospital Maintenance Tax funds have never been sufficient to pay more than three days of the daily cost of operating ACH, easily less than 1 percent of the annual cost of operating ACH.”
Noting that Blakely’s lawsuit began after she made a Freedom of Information request to the hospital about its finances that was rebuffed by Children’s Hospital, Fox suggested that the litigation could have been avoided if Children’s Hospital had supplied the county annually with basic financial documentation related to the tax collection.
The hospital could show how much it receives in revenue from Medicaid and release the numbers on how many county residents it treats, what kind of treatment it has provided for residents and how much it spends treating residents, the judge wrote.