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Oak Hill Hospital expansion gets a tax break, but at what cost to Hernando County citizens?

Even those of us who hated the idea of zeroing out impact fees, who fumed about the Hernando County Commission's early Christmas present to builders last month, figured that once the wrapping paper was torn off, the box would be pretty much empty.

With the construction industry barely limping along, how many houses, stores and offices would be built in the next year? Very few.

And how much revenue would be lost, especially if the commission really does limit this break to one year, as planned? Not much at all.

It turns out that this assumption was not quite right, and that some of the people most aware of it were the ones pushing hardest for the tax break.

At the meeting on Nov. 1, when the commission first talked about severely slashing these one-time fees on new construction, Len Tria read a resolution from an organization of business powerhouses, Hernando Progress Inc.

He dutifully listed all of the expected arguments about what a great boost a big reduction in impact fees would be to the construction industry, how many jobs it would create, what a powerful force it would be for jump-starting the economy — even though, it should be pointed out, previous impact fee cuts in Hernando and other counties have proven this not to be true.

What Tria didn't mention was what was at the bottom of the resolution: the signature of Mickey Smith, president of Hernando Progress and, more to the point, chief executive officer of Oak Hill Hospital, which is planning a $50 million expansion.

For this, the hospital would have paid $320,000 in impact fees. Now, of course, it will pay nothing.

Smith said that as Hernando Progress president, he didn't vote on the resolution, and at the board meeting on Oct. 28, when it was approved, he didn't join in the discussion.

And, he said, he had actually been trying to speed the hospital's building permit along because he genuinely believed the previous and supposedly temporary reduction in the fees would expire, as scheduled, on Dec. 1.

That seems a little naive for such a seasoned businessman, kind of like hearing a graduate student talk with wide, hopeful eyes about Santa Claus.

But I checked with the county, and it turns out the hospital did submit its permit on Aug. 5, early enough to give it a chance for approval by the deadline before the fees changed.

Oak Hill never showed any signs of dragging its heels, said zoning supervisor Chris Linsbeck, and the only thing still holding up its approval is a permit from the Southwest Florida Water Management District.

Smith said, as people in his position usually do, that taxes on business, passed along, are really just taxes on customers.

"Hospitals don't pay impact fees," he said. "Patients pay impact fees."

But he also acknowledged that even though Oak Hill got its break, it won't be passing along, for example, any special offers for long stays, no generous discounts. Not even any noticeable ones.

That's because — let's face it — his industry sends out bills that would make a defense contractor blush. In the hospital business, unlike probably any other sector of the current local economy, $320,000 is peanuts.

Partly because of this, I don't think Smith intentionally dodged the hospital's obligation to pay these fees. But I do think Hernando Progress should have mentioned Smith's connection and how much he stood to save. And if the commissioners were aware of this — and, remember, this hospital expansion is the biggest thing going in the county right now — shouldn't they have looked out for residents rather than Oak Hill?

Absolutely.

Because if you want a case study of what impact fees are supposed to do, the Oak Hill project works pretty well.

Being a commercial project, most of the impact fees would have gone to new road projects, especially to bolster the threadbare network north of State Road 50.

Eight more operating rooms, 36 private rooms and 18 additional beds for post-surgical recovery. Obviously, that will put more doctors, more patients, more family members and more ambulances on those roads. Obviously, a business as able to pay as Oak Hill should.

Because, in case you haven't been paying attention lately, to county government, $320,000 is not peanuts.

Oak Hill Hospital expansion gets a tax break, but at what cost to Hernando County citizens? 12/10/11 [Last modified: Sunday, December 11, 2011 1:24am]
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