The Pike County Health Department has been listed by the Kentucky Department of Public Health as one of 42 county health departments in Kentucky that are at risk of closing its doors within the next year, due to financial strains on the departments’ payrolls from crippling pension costs.
The Kentucky Department of Public Health also listed 22 county health departments that are at risk of closing their doors within the next two years, including departments in counties like Floyd and Lawrence.
On July 1, if no legislation is passed to freeze current pension rates for another year in Kentucky’s state legislature during a special session, health departments will be required to increase their employer contribution costs under the Kentucky Employee Retirement System from 49.47 percent to 83.43 percent. This makes the 64 county health departments at risk of closing within the next two years after running out of reserves.
Cindy Hamilton, interim director of the Pike County Health Department, said she does not see the health department closing within the year, though, thanks to fortunate financial savings at the department. Hamilton said several employees at the health department have retired or moved on to different positions, which has saved about $700,000 this year for the department.
“Although we are sad to lose those employees, it has been a huge help there and has lessened the impact,” Hamilton said. “If that had not happened, we would be in a different situation.”
Hamilton said the total fringe budget of the health department during the last fiscal year totaled about $1.6 million, and that budget is expected to increase this year to about $2 million. If those employees had not left, she said the total would have been “significantly greater.”
“It’s unfortunate for the health departments in other counties that are about to close their doors,” Hamilton said. “I do hate it for them.”
According to information published this week by Kentucky Health News, Kentucky Public Health Commissioner Jeffrey Howard is asking health departments to “drastically cut services” to ensure the “survival of public health in the state.”
Hamilton said she anticipates services will be provided the same this year, but there may be cuts to provided services after the next fiscal year, like certain cancer screenings and family planning services.
“We will start to focus more on the core services we provide and will be looking at these services,” Hamilton said, referring to how cuts could be made after the next fiscal year.
State Rep. Angie Hatton, who represents part of Pike County and Letcher County in District 94, said because the residents of Pike County rely much more on the health department than other counties, they would feel the effects of the health department’s closure much more. She said if the county health department closed, she expected the hospitals to become much more crowded.
Hatton said if the local and district health departments close, the state would be federally-mandated to provide the services that those departments provide, including restaurant inspections, immunizations, addressing Hepatitis A and C outbreaks and other county wide public health matters. She said the state having to provide these services would be a “terrible blow” to the state’s health budget.
“It’s something that we just can’t allow to happen,” Hatton said, referring to the closure of the local and district health departments.
The drastic increase in pension obligations would affect all other KERS employers in the state that are privately managed and supported by the government, including domestic violence shelters, rape crisis centers, child advocacy centers, regional mental health organizations and other quasi-governmental agencies. Universities, like Eastern Kentucky University and Morehead State University, will also be affected. There are 6,400 Tier I and Tier II employees statewide that could be potentially affected by the increase in pension obligations, including health department employees, Hatton said.
During the regular legislative session that ended in April, Gov. Matt Bevin vetoed a bill that would have provided some relief to the health departments, saying the bill violated “both the moral and legal obligation” that the state had to its public sector retirees. Bevin has not yet called for a special session of the legislature, but he proposed a bill on Wednesday to address the looming crisis. According to the Courier Journal, the bill has failed to receive sufficient support among lawmakers before a special session of the legislature is called to vote on the bill.