House lawmakers present plan to repurpose ballpark tax in HCMC rescue bid

When the House Taxes Committee hosted a hearing on March 18 on the fragile financial health of Hennepin County Medical Center, the committee’s co-chair, Rep. Greg Davids (R-Preston), said, “Some of the solution may come out of this committee.”

On Thursday, the first proposal for how to help the hospital overcome its difficulties arrived.

Rep. Esther Agbaje (DFL-Mpls) sponsors HF4841, which would modify a Hennepin County sales tax created for the development, construction and public infrastructure of Target Field, channeling some of its proceeds to grants for Hennepin County Medical Center (HCMC) in downtown Minneapolis and the hospitals of North Memorial Health in Robbinsdale and Maple Grove.

The bill would extend and increase the current sales tax in Hennepin County from 0.15% to 1%, modify the capital reserves for the Minnesota Twins home, and provide authority to the county to issue bonds and acquire property in relation to health care facilities in the county.

The House Taxes Committee laid the bill over for possible omnibus bill inclusion.

Rep. Danny Nadeau (R-Rogers) is the co-sponsor of the bill.

“Every hospital struggles with dealing with a balanced patient mix,” he said. “But HCMC has less control over this than any other system, driving massive uncompensated care costs, contributing to annual operating margin gaps of more than $190 million.

“HCMC is at a tipping point that it might not be able to return from. Losing any hospital would put our health care system under incredible pressure. But closing HCMC would be a disaster to the state’s entire health care system.”

The proposal would allow the county to allocate the tax revenue remaining after grants are made to the ballpark authority and for activities relating to youth sports and libraries, as earmarked in the original sales tax enacted in 2006. Of the remaining revenue, $24 million would annually go to North Memorial in Robbinsdale and Maple Grove, while the remaining funds would go to Hennepin County Medical Center and county health initiatives.

In addition to being the state’s primary “safety net” hospital for the uninsured and underinsured, testifiers emphasized that HCMC is a Level I trauma hospital that provides statewide ground and air emergency medical transportation services. It’s also one of the state’s major teaching hospitals, with more than one testifier saying that half of all Minnesota doctors have received some training there.

The allocation to North Memorial would be determined by a formula involving the amount of uncompensated care and the reimbursement rates for medical assistance and Medicare. It would not receive any payments from the county if its ownership or majority control is sold or transferred to a for-profit entity.

The bill also includes provisions for capital improvement grants for the ballpark of up to $7 million annually and authorizes the issuance of revenue bonds. It would also alter a ballpark capital improvements reserve fund, increasing the annual payments from the county from $2 million to $14 million and the Twins’ annual contribution to that fund from $1 million to $7 million.

The Revenue Department indicates the bill would have no direct impact on state taxes, and that Hennepin County’s sales and use tax generated about $50 million of revenue in calendar year 2025. If the rate had been 1% in calendar year 2025, the tax would have generated about $337 million.

Rep. Chris Swedzinski (R-Ghent) questioned if the hospital was finding enough efficiencies in reducing costs, while Rep. Steve Elkins (DFL-Bloomington) said he believes a county sales tax isn’t the best funding avenue, adding that it would bring the sales tax in most of the county’s communities to 10%.

But most committee members spoke of HCMC’s essential role in the state’s health care infrastructure.

“The top priority for this Legislature is that we save HCMC,” said Rep. Michael Howard (DFL-Richfield).

“We have to get this right,” Davids said. “We have six weeks to do this. There is an urgency to this.”