ANACORTES, WA—The Island Health Board of Commissioners recently voted to ask Public Hospital District No. 2 (Island Health) residents to approve a 41-cent increase in its annual Maintenance & Operations (M&O) property tax levy on the April 2025 ballot.

As a public hospital district (PHD), Island Health relies upon taxpayer support to help meet the healthcare needs of its residents. Currently, Island Health collects approximate $3.4M in funding from the district’s taxpayers, which is less than 3% of the organization’s total revenue. Over 78% of Island Health patients have government insurance (Medicare, Medicaid or Tricare) which means the organization is reimbursed at a fixed rate, with no opportunity to renegotiate payments. With the rising costs of healthcare supplies and labor, expenses have outpaced revenue since the COVID-19 pandemic began in 2020. For example, in 2024, it cost over $330,000 per day ($122M per year) to operate Island Health— a 21% increase over pre-pandemic expenses in 2020.

The levy would generate an additional $4M annually to provide funding for the equipment and facility improvements needed to increase access to critical healthcare services in our rural community, such as 24/7 emergency and intensive care, as well as expand access to specialized care such as cardiology, mental health, obstetrics, orthopedics, pulmonology, senior care and urology. Thus providing less travel out of the district for the highest-quality healthcare available north of Seattle, as rated by the Centers for Medicare and Medicaid.

“Without an additional reliable, steady source of revenue, it will become even more difficult for the hospital to operate as a 5-star healthcare provider in our community and expand needed services,” said Board President Lynne M. Lang, PhD.

The Island Health leadership team has embarked on several initiatives to increase revenue and reduce expenses over the last several years, including streamlining operations and negotiating with commercial insurance companies, while also advocating at the state and federal levels for funding. This advocacy has been beneficial in obtaining grants for key capital projects, such as the rooftop helipad and the surgical robot, scheduled to come online this spring. More funds are needed to continue responding to the hospital district’s growing healthcare needs.

“We are optimizing all systems and exploring all options to increase revenue; however, local healthcare requires a local solution. The advantage of a PHD is that residents have ownership in their healthcare. We are asking voters to keep quality healthcare in our community,” said Lang.

Voters approved the last levy request in 2017. The 2025 levy would raise the levy to 75¢ per $1,000 of assessed property value. The average homeowner with a property value of $800,000 will only pay an extra 89¢ per day if the levy is approved. Ballots will be mailed April 2 for an April 22 election.

For more details, please visit http://www.islandhealth.org/fundingahealthyfuture.