UofL’s Kentucky One Health loan was an unnecessary expense for taxpayers
By JIM WATERS
Bluegrass Institute for Public Policy Solutions
Thursday, Dec. 15, 2022 — The University of Louisville Cardinals men’s basketball squad gave its fans a timely stocking stuffer on Wednesday with the team’s first win of the season, beating the Western Kentucky Hilltoppers on E.A. Diddle Arena’s hardwood.
UofL’s health care system should follow suit and offer taxpayers some Christmas joy by fully repaying the $35 million borrowed from the commonwealth under the auspices of needing the money to purchase Kentucky One Health’s assets, including Jewish Hospital.
The money was neither needed nor used for these purchases.
In previous columns, we urged lawmakers to “invite the university to either pay for this project out of its already-flush-with-cash pockets or seek a loan from the private sector.”
Kentucky’s taxpayers “should be outraged that UofL lobbied heavily for this loan even though the university is flush with hundreds of millions in cash and is more than capable of making this acquisition without one red cent from Frankfort’s coffers,” we opined.
But taxpayers’ voices were drowned out by the Santa-sized claims of former UofL President Neeli Bendapudi, who doubled down on her assertions that the loan was “vital” to purchasing the additional facilities and that there was no other way for the university to absorb Kentucky One Health’s operating losses.
Documents obtained by the Bluegrass Institute Center for Open Government reveal that not only was UofL capable of acquiring the funds to make needed improvements to the previously faltering Kentucky One Health system without the government loan, but that the monies were used for a variety of capital purchases, including upgrades to the system’s emergency medical records platform, computer replacement/remediation and replacing a roof at Jewish Hospital.
Such outlays can improve a hospital’s ability to provide quality care, but were they so “vital” that UofL needed a subsidized, partially forgivable taxpayer-backed loan from state government to purchase them?
“Partially forgivable”?
This health care giant is only required to pay back half the loan even though the enterprise reaped year-over-year total operating revenues of $2.2 billion while holding more than $1 billion worth of total assets during the most recent fiscal year, according to audited financial statements obtained by the Center for Open Government via the open records law.
In their annual report to the Legislative Research Commission, Kentucky One Health officials indicated they anticipated paying back “the obligated portion of the loan” ($17.5 million) ahead of schedule.
Bluegrass Institute Visiting Policy Fellow Andrew McNeill instead urges the company to “meet this moment by respecting Kentucky’s working families and taxpayers who ponied up for what has proven to be an unnecessary loan” by going beyond what’s statutorily required and repaying the entire loan.
New UofL President Kim Schatzel, whose administration officially begins in February and who has extensive business and private sector experience, should appreciate what a welcome gift that would be for the commonwealth. Perhaps she could help spread some needed holiday cheer by voicing her own support for full repayment – a real gift for the Bluegrass State.
McNeill wrote in a letter to Interim Joint Appropriations and Revenue Committee members that such a gesture “would make an immediate and positive impression with Kentucky’s taxpayers, especially those from outside of Jefferson County.”
One more item: on the day of this column’s release, the Kentucky Supreme Court donned its collective Scrooge suit, ruling against school-choice legislation that could benefit thousands of students through access to private voluntary funding for educational services, supplies and better schools.
This ruling especially harms Kentucky’s most at-risk children from low-income homes who disproportionately remain in failing schools. They now have little hope of a better education or brighter future.
Regarding this court ruling, I’m not finding any expression more apropos than “Bah! Humbug!”
Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. Reach him at jwaters@freedomkentucky.com and @bipps on Twitter.
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