Gov. Walker Joins WHA in Support of Tax-Exempt Financing

69 WI health care leaders send letter urging Speaker Ryan to retain PABs

December 15, 2017

On December 12, Gov. Scott Walker urged U.S. House Speaker Paul Ryan and U.S. Senate Majority Leader Mitch McConnell to retain the tax exemption for private activity bonds (PABs), including for qualified 501(c)(3) hospital bonds. In doing so, Walker joined the Wisconsin Hospital Association (WHA) and 68 other hospital/health system leaders in sending a letter urging the Speaker and conferees to support PABs.

“Currently, state and local governments can utilize private activity bonds to invest in hospital projects that have a public benefit. Non-profit hospitals and health care providers in Wisconsin rely on these private activity bonds to keep infrastructure costs down so that they can focus their valuable resources on patient care and service delivery,” wrote Walker in his letter to Speaker Ryan and Majority Leader McConnell. “I urge you to keep the tax exemption for private activity bonds.”

In a separate letter also sent this week to Speaker Ryan, 69 Wisconsin hospital/system CEOs, WHA and health care leaders urged continuation of PABs and questioned the rationale for their elimination.

“When Congress originally established PABs, hospitals were among those included because of their importance to their local communities and their mission of serving the public good. That is why we are perplexed by the rationale used in the U.S. House Ways & Means Committee summary of this provision, which equates our organizations’ collective purpose—to serve as the health care infrastructure and safety net in the most rural to urban areas of the state—to private business with “similar creditworthiness,” read the WHA, health care leader letter. “We do not see the rationale for nor the wisdom of this policy and, therefore, ask you to retain the tax exemption for PABs, including for qualifying 501(c)(3) hospitals bonds, in the final negotiated package.”

Additionally, U.S. Rep. Mike Gallagher joined 38 House Republicans in sending a letter to Speaker Ryan, Majority Leader McConnell and Chairs Hatch and Brady in support of PABs.

“As Republican members with an interest in infrastructure, we want to express our strong support for maintaining the tax-exempt status for private activity bonds,” the House letter began. “PABs are important financing tools in a wide range of projects from hospitals and schools to airports and local water facilities.”

“Given the administration’s stated priority for increasing investment in infrastructure, we believe the elimination of tax-exempt private activity bonds would be a step in the wrong direction…In fact, it will make infrastructure projects more expensive and limit our ability to effectively leverage the public investment from the federal government.”

WHA’s advocacy on PABs began immediately when the issue arose in early November, including traveling to Washington, D.C., sending and organizing multiple letters, working with the Wisconsin Health & Education Facilities Authority and mobilizing well over 500 grassroots contacts to Wisconsin Delegation members.

“WHA expresses our appreciation to Governor Walker, U.S. Rep. Gallagher, Wisconsin hospital/system leaders and all other legislators who are fighting to protect this important financing tool,” said WHA President/CEO Eric Borgerding.

This story originally appeared in the December 15, 2017 edition of WHA Newsletter