Health department's fate rests on HB 358
SALYERSVILLE – The local health department, along with many others in the state, is currently waiting to see how the legislators handle one bill that could potentially close them within a year.
Salyersville Mayor and Magoffin County Health Department Director James “Pete” Shepherd sat down with the Independent and Mortimer Media Group on Tuesday, explaining the importance of House Bill 358.
With today, March 28 as the last remaining legislative date for the current session, the Kentucky House of Representatives will have the opportunity to consider passing HB 358 with the Senate Committee Substitute (1), which would give quasi-governmental entities, like the Magoffin County Health Department, a one-year reprieve, buying them hopefully enough time to make some tough changes to accommodate the inevitable increase in pension costs.
Right now, the health departments, as well as the regional health programs, domestic violence shelters, rape crisis centers, child advocacy centers, state supported universities and community colleges, etc., pay 49.47 percent for their payroll pension contribution, but as the current legislation stands, that rate will jump to 84 percent next fiscal year.
“That would cost us $120,000 next year, which we just don’t have,” Shepherd said of the health department. “It would be one year to 14 months until we bankrupt.”
The quasi-governmental entities pay into the Kentucky Employees Retirement System, which is less than 13 percent funded currently and considered the worst-funded public pension system in America, according to the letter Governor Matt Bevin sent to members of the General Assembly last week.
The Kentucky Senate has made an amendment to HB 358, which if the House approves today, will give the “quasis,” such as the health department a one-year reprieve to remain at the current rate of 49.47 percent, giving them time to restructure and plan for the inevitable increases that have to happen.
Shepherd explained that with the new restructuring, set by the Department for Public Health, the Magoffin County Health Department technically needs three employees (going by population), and the state will fund the three at $109,000 each (for the employees, benefits, and the costs of the programs they would be running).
They will also be required to cut all services that are offered anywhere else, including well-child visits, colon cancer screenings, breast cancer screenings, Pap smears, and other services that can be obtained at doctor’s offices.
With the restructuring they will keep all services relating to the opioid crisis, the vaccination programs, the bioterrorism program, as well as HANDS and WIC.
Newer employees will lose health benefits after they retire with the restructuring as well, which he said they will more than likely have to contract out for new employees with that change.
If the House doesn’t pass HB 358 with the amendment, 41 counties’ health departments, including most in Eastern Kentucky, are projected to close within in 12 months.
Shepherd said the KERS had close to $16 billion in unfunded liability as of 2018, making the increase in pension costs for the agencies inevitable, but the change needs to be gradual in order to not bankrupt these necessary agencies.
“We’re mandated by the state to provide public health services, so there would have to be a restructuring at the legislative level if this doesn’t pass,” Shepherd said.
Possible scenarios for what could happen include the creation of regional health departments, or a complete change in legislation regarding funding for public health.
Shepherd said the governor will pass HB 358 if the House passes it. He asked that the community reach out to Representative John Blanton and Senator Brandon Smith to voice support of the bill.
“People in the community need to tell them they think HB 358 needs passed and that they want to keep the health department in Magoffin County,” Shepherd said.
In the past six years the Magoffin County Health Department has gone from 19 employees to nine, cutting costs through retirements.
“If this doesn’t pass, the rate jumps to pretty much double, and we’re closed in a year,” Shepherd said. “Even for the richest districts, five years will be a long time.”