Hennepin Healthcare is in a desperate fight to stay open.
“It’s very dire, the need is immediate, it’s urgent,” declares Jeffrey Lunde, the chair of the Hennepin Healthcare Systems Hospital Board. “The hospital is a statewide asset, but yet all the expenses are borne by Hennepin County property tax owners, and we need to rechange that mix.”
That urgency is reflected by new changes announced Wednesday.
Effective immediately, the system is reducing patient beds by 100, to a cap of 390.
Administrators are freezing 401(k) contributions, pausing $24 million in infrastructure projects and cutting out $1.2 million in travel expenses.
Hennepin Healthcare paused a benefit that allows non-union employees to trade PTO for fitness-related expenses.
Lunde says the goal is to save $50 million in the first quarter of this year and $150 million by the fall.
He says additional difficult questions may be ahead, including “a reduction of force.”
“We need to be restructuring, need to be more efficient,” Lunde notes. “More operational, more effective, and we’re making these changes.”
The changes come after the loss of pandemic dollars and expected federal reimbursements totaling $1.7 billion over the next decade.
So now, a long-haul plan is being proposed, using state sales tax revenues from Target Field.
“Right now, that existing tax goes to pay off the bonds for Target Field — that’s what the tax is directed toward,” Lunde explains. “We need the Legislature’s approval to allow us to repurpose that. But we will take the additional money and partnering with North Memorial and directing most of those funds toward the hospital.”
He says those bonds could be paid off by 2027.
Under the plan, the sales tax would be increased from 0.15% to 1%.
That 1% sales tax would raise about $341 million, according to county financial data.
Current bonds outstanding are about $26 million, and the last payment is due in 2032.
But that could be paid off as early as December, a county spokesperson says.
After the bonds are retired, if the sales tax proposal moves forward, the full $341 million would be available to support ballpark-related investments and activities, as well as health care.
A spokesperson for the Minnesota Ballpark Authority says the county proposal would also “support future capital expenditures for the ballpark and related public infrastructure, and provide for a ballpark lease extension to 2059, with two ten-year renewal options.”
Dan Kenney, the Authority’s executive director, says the group “…remains committed to working closely with Hennepin County and the Minnesota Twins in 2026 to support the County’s healthcare funding initiative, and to ensure Target Field remains a top-tier ballpark and a key destination in downtown Minneapolis for many years to come.”
Lunde’s selling point to lawmakers?
That sales taxes would be a better deal than raising property taxes in Hennepin County — he reasons that one-quarter of the system’s patients come from outside the county.
Lunde says time is running out.
“Without that sales tax, the idea of closure becomes more realistic. We’re just saying, let us repurpose the existing tax and put it to a new need,” he explains. “We can’t wait until next year. There is no ‘we’ll get it done next session.’ Next session is a fail, and the next session, we’ll have to make tough choices by then.”
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