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Montezuma Hospital District asking voters to drop sunset on sales tax and reduce mill levy

The Montezuma County Hospital District will have an election May 3 to ask voters for permission to keep a sales tax. (Journal file)
Ballot initiative would allow financing for hospital upgrades and maintenance

In a special district election May 3, Referendum 6A from the Montezuma County Hospital District will ask voters to remove the sunset provision on a 0.04% sales tax in exchange for reducing the district mill levy by 25%.

The sales tax, which amounts to 4 cents for every $10, was approved in 2015 and is set to sunset in 2030.

The hospital district seeks voter permission to collect the .04% sales tax in perpetuity and use it to finance $23 million in upgrades and maintenance of Southwest Memorial Hospital.

According to ballot language, the additional funding would pay for construction of an Emergency Department, renovations of surgery facilities, replacement of hospital equipment and maintenance of the hospital campus.

The funding also would pay for operation and use expenses for hospital facilities, including the new emergency department, the new patient wing, outpatient care facilities and the ambulance parking facility.

If the ballot measure is approved, the hospital would restructure its $32 million bond debt to $55 million through the issue of revenue bonds backed by the sales tax.

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A $32 million campus improvement project in 2018 included the two-story, 25,000-square-foot medical office building, new 13-room hospital patient wing, upgraded birthing center, new front entrance and lobby, new EMS station and campus consolidation.

To reduce the burden on property taxes, if the measure passed, the district mill levy would be reduced by 25%, dropping it to 0.7455 mills from 0.994 mills.

The mill levy reduction would be permanent. Over the next eight years, it would save property owners and estimated $1.1 million.

According to the district, the ballot initiative “spreads the funding of local health care across a wider spectrum, as all District residents as well as all people passing through the district are subject to the current sales tax.”

The hospital district encompasses all of Montezuma County.

“Extending the sales tax effectively provides revenues for local health care from county residents and tourists, not just from property owners,” said Robert Dobry, secretary-treasurer for the hospital district. “Reducing the mill levy also reduces the tax burden for property owners.”

He said the district plans an education campaign to inform the public of the ballot initiative and election, which will be by mail.