Denton hospital to switch to nonprofit, city to lose tax dollars

by Mary Pharris of North Texas Daily

The city of Denton lost its No. 1 taxpayer as Denton Presbyterian Hospital recently became a nonprofit hospital impacting city, school district and county property tax revenue.

Texas Health Resources acquired Denton Presbyterian, now Texas Health Presbyterian Hospital Denton, on April 1 after more than a year of negotiations.

The switch from a for-profit to nonprofit hospital makes the hospital tax-exempt, said Wendell Watson, a spokesman for Texas Health Resources.

The 2008 certified value for the hospital property, located at 3000 N. Interstate Highway 35, is $97.7 million according to the Denton Central Appraisal District, the entity responsible for assigning property value for property taxes.

The hospital previously paid about $2.9 million annually in local property taxes, Watson said.

With a current property tax rate of 0.23577 cents per $100 value, the county stands to lose about $300,000 in revenue, said Denton County Judge Mary Horn.

"If it's $300,000 to the county, it's at least double that to the city and several times more than that to the school district," Horn said. "It's a huge impact."

The Denton Independent School District faces the biggest tax impact, Watson said.

The district will lose about 1 percent from both its debt service and maintenance and operation budgets, equating to about $485,000 and $1.6 million from each budget, respectively, said Debbie Monschke, executive director of administrative services for the district.

However, state funding will offset the loss to the district's maintenance and operation budget, Monschke said. The major impact, she said, will affect the district's debt service budget - money apportioned to pay down the district's debts.

The loss in revenue could affect the district's ability to pay its debt or require an increase in taxes, Monschke said.

However, the district won't know the total impact until it receives the 2009 certified property values from the appraisal district in July, she said.

The district's current tax rate is set at $1.49 per $100 value.

The city also stands to lose about $715,000 per year as it is no longer able to tax the hospital, said Brian Langley, director of finance for the city.

The loss in revenue is one of many changes the city is facing in formulating its budget plan, Langley said. He is currently working with the City Council to assess how the loss will impact the city's ability to provide services, he said.

"The president of the hospital, Stan Morton, has been in contact with most of the leaders in the community, and we're looking at several things we can do to contribute to the community," Watson said of the loss of tax revenue to the city, district and county.

Texas Health Resources operates 14 hospitals in the Dallas-Fort Worth area and offers one of the largest faith-based, nonprofit health services in the United States, according to the organization's Web site.

By the Numbers

$300,000 - Revenue Denton County could lose from switch

$715,000 - Revenue city of Denton could lose

$97.7 million - Value of hospital