Fulton could cut spending on Grady by $25 million

Fulton County may cut $25 million in funding for Grady Memorial Hospital next year — a cut the hospital says could devastate programs for the mentally ill, the poor and other vulnerable groups.

The hospital already faces steep federal and state budget cuts, and combined, the reductions could cost Grady nearly $100 million in funding to care for Atlanta’s poor and uninsured.

The losses could force Grady to shutter neighborhood clinics, increase co-pays, limit access to specialty care and cut jobs, Grady CEO John Haupert said in an exclusive interview with The Atlanta Journal-Constitution. It could also mean more pressure on county-funded health clinics.

“It’s concerning to me that the neediest in this community are the ones paying for budget shortfalls,” Haupert said.

The cuts, however, aren’t final.

County Commission Chairman John Eaves said he hopes to restore Grady’s funding before a final 2014 budget is approved in January. He’s proposed a new property tax dedicated to the hospital.

“There’s a strong possibility that an alternative revenue source will be generated to make sure that cut does not occur,” Eaves said.

But it’s unclear whether a majority of commissioners will support the new levy. And if they do, it could spark a backlash in the General Assembly, which prohibited Fulton from raising property taxes earlier this year.

State Rep. Wendell Willard, R-Sandy Springs, doubts Fulton can legally impose a new tax. He thinks the county can balance its budget by other means.

“There’s ample funds there,” Willard said. “Twenty-five million dollars is a mere drop in the bucket.”

Fulton and DeKalb counties have long supported Grady’s mission of caring for needy patients. This year Fulton will contribute $50 million to the hospital’s operations; DeKalb will pitch in $11.2 million.

But in recent years the Great Recession has taken a toll on county revenue. To ease some of the budget pressure, Fulton refinanced some Grady-related debt last year. As a result, the county didn’t have to make a debt payment this year.

But debt payments will resume in 2014. That would bring the county’s total funding of Grady to $66.3 million.

The proposed 2014 budget to be presented to commissioners Wednesday scales back that contribution to $41.3 million. The $25 million reduction is by far the largest of $56.9 million in cuts proposed in the county’s $569 million general fund budget. Other cuts include $7.3 million for libraries, $4 million for human services, $3.8 million for the Sheriff’s Office and $1.5 million for the arts council.

The proposed Fulton cut comes as Grady also faces the loss of $45 million in federal funding to care for the uninsured and an additional cut of $24 million in Medicaid funding. Haupert said he is working with officials to try to mitigate some of those cuts.

Closed clinics and less access to specialty care will hurt many of metro Atlanta’s poorest, most vulnerable residents, Haupert said.

“If (the counties) can no longer fund indigent care, then who do they think is going to?” he said.

Mental health services could also be at risk.

Grady — one of the largest providers of mental health services in the state — loses between $6 million and $8 million each year caring for roughly 10,000 mental health patients. Fulton residents make up nearly 80 percent of those patients. The hospital spends about $200 million each year caring for the poor and uninsured.

If Grady cuts those services, much of the burden could land on county-funded clinics, Haupert said. “I seriously doubt they could take on the volumes (of patients) we’re talking about,” he said.

The safety-net hospital has struggled with budget shortfalls for years and at one point was in danger of closing its doors. Now, it makes a modest profit.

Until now, Grady has absorbed previous funding cuts from the counties without sharply cutting services. But that meant putting off repairing deteriorating facilities and replacing aging medical equipment. That’s not an option anymore, Haupert said.

“We’re not going to run this place into the ground,” he said. “We have to keep Grady viable. We have to keep it healthy.”

Eaves hopes the tax he proposed last summer can restore Grady funding. The proposal would cost the owner of a $200,000 home an extra $75 a year.

But in July commissioners rejected the proposal, saying it was a bad idea to raise taxes while the economy was still sputtering. At least one commissioner thinks it’s still a bad idea.

“That’s asinine,” Commissioner Robb Pitts said recently. “We don’t need to raise taxes to balance the budget if we implement cost-savings measures and stick to mandated services.”

Commissioner Tom Lowe was noncommittal.

“I’ve been worried about Grady’s budget for 39 years,” Lowe said, but added, “I don’t know what to think about” the proposed tax.

A new tax likely would spark another confrontation between county Democrats and Republicans in the General Assembly. The Republicans say Fulton spends too much. Last spring they passed a series of measures — including a property tax freeze until 2015 — to force Fulton to cut spending.

Willard said Fulton is using the threat of a Grady cut as public relations “leverage.” He said state lawmakers may take additional steps to reshape county government next year.

“We’ll have to see what their (tax) scheme is,” he said.

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