Questioning a new tax to boost medical research

08/21/2013 1:11 PM

08/21/2013 7:54 PM

Children’s Mercy Hospital CEO Randall L. O’Donnell earns around $1 million a year for leading that organization. Back in 2009, thanks to a large bonus for years of service, he received $6 million.

Now O’Donnell is among those who want Jackson County voters this fall to approve an $800 million, 20-year, half-cent sales tax increase for medical research in a county where the median household income is $46,874.

His hospital would get about $20 million of the $40 million raised annually by the tax. St. Luke’s Hospital and the University of Missouri-Kansas City each would get about $8 million. The remaining $5 million would go into a pool of funds for uses that supporters haven’t yet fully explained.

Some of the $40 million would pay a limited number of “principal investigators,” who would earn vastly more a year than Jackson County’s residents, and hire support staffs for those highly skilled researchers. The three organizations also would buy millions of dollars worth of lab equipment.

Jackson Countians have experience with sales taxes that, at least indirectly, help the rich get richer. Remember the 2006 campaign to renovate the Truman Sports Complex for the wealthy owners and millionaire players for the Chiefs and Royals?

In that case, residents got something concrete for their tax dollars through better stadiums that guaranteed keeping the two major league teams here another 25 years.

The medical research tax offers no such guaranteed return for taxpayers, outside the fact that $800 million would be spent in the name of economic development.

Backers do hope the investment would make the county a national leader in moving research into products, but the tax relies on just one county’s sales to bet on a big dream. Plus, any positive results would solve national — not just local — health problems.

Voters narrowly did pass the three-eighths-cent tax increase for the sports complex, so the Civic Council of Greater Kansas City and other boosters of the medical research initiative have reasons to think they have a chance with voters, too.

They are ready to unleash political operators Steve Glorioso, Jeff Roe and others to promote a $1 million-plus ad campaign promising many good things — cures for diseases, new equipment to improve health care for children, sharing some net proceeds of research with the county — if the tax passes.

As Hallmark President and CEO Don Hall Jr. told the Jackson County Legislature, “This could be a real game changer for our community.”

All indications are that the plan will get on the Nov. 5 ballot, despite being unveiled barely two weeks ago.

The secrecy was calculated. Some public officials privately are concerned that this tax is proposed even while great needs remain to improve roads, bridges, transit, public safety and other community assets that normally receive sales tax revenues.

At Monday’s Jackson County Legislature meeting, lawmaker Bob Spence adroitly questioned the supporters’ contention that the county would receive 20 percent of the “net revenue from commercialization efforts” of future medical research.

“Don’t hang your hat” on that return, Spence said. He suggested that if venture capitalists really thought the medical research talked about here was a no-brainer to make money, they would be investing millions in the cause.

Obviously there’s still much to figure out about how residents could benefit from the 20 percent offer.

But there’s no question that, if voters approve the tax, Children’s Mercy Hospital and a select few other organizations will get $40 million a year from the public.

Whether that’s a reasonable proposition is an important topic this community will spend the next 10 weeks debating.

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