Bluegrass Institute president and CEO Jim Waters spoke recently at the Louisville Forum in opposition to a proposed $50 million “partially forgivable” taxpayer-backed loan from the commonwealth to assist the University of Louisville in its purchase of Jewish Hospital. (Since this presentation, U of L has reduced the amount of its loan request to $35 million.) Following are his prepared remarks.
Good afternoon ladies and gentlemen.
Thank you for the opportunity to join this discussion today. Thanks, as well, to my fellow panelists.
The Bluegrass Institute for Public Policy Solutions is now in its 17th year of providing a free-market approach toward solving Kentucky’s greatest challenges. That’s why one of our strategic objectives is to reform our public-pension system so that it no longer threatens our state’s economy. Fifteen cents of every General Fund dollar in our commonwealth’s current two-year budget – $3.3 billion altogether – has been designated just for pension funding. Yet we still face a $48 billion unfunded pension liability. Add K-12 and higher education spending, and around 65 cents of every General Fund dollar is already committed.
Considering the austere budget situation legislators will face when they return to Frankfort in January, taxpayers and their representatives must have much more information about this project in general and, specifically, the request for $50 million. At the very least, there must be a much fuller and more vigorous debate – before a single check is written for this ill-advised project.
We need to know much more about why potential private buyers for this project backed out.
We need to know more about why Jewish Hospital is struggling and has struggled; we need a forensic review of the finances.
We need to know what the plan is for turning the financial situation of this hospital around.
(Instead, a greater case can be made for financial help from the state for hospitals in rural areas, which, along with school districts, are the anchors of those communities.)
We need to know why this $50 million is being billed as an economic-development loan when it’s not going to create any new jobs. The fact is, most of the jobs which now exist at Jewish Hospital could be absorbed into the current medical community if this particular facility closed.
Why are we being told that $25 million of this $50 million loan would be “forgivable”? That makes no sense whatsoever to taxpayers.
View the full Louisville Forum debate here.