Item Description:
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Support for an increase in the county sales tax to support Hennepin Healthcare System, North Memorial and Target Field - offered by Commissioners Conley and Lunde
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WHEREAS:
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WHEREAS, Hennepin Healthcare System, Inc. (HHS) is a government-owned safety net hospital and Level 1 trauma center providing critical care to Minnesota and the surrounding region; and
WHEREAS, over 75 percent of patients at HHS receive care paid for through public programs such as Medicaid and Medicare; and
WHEREAS, HHS is the largest Medicaid provider system in Minnesota ; and
WHEREAS, nearly 1/3 of patients coming to HHS are from outside Hennepin County; and
WHEREAS, 40 percent of patients needing trauma or burn specialty care from 2020 to 2024 were from outside Hennepin County; and
WHEREAS, HHS provided patients with $104 million in uncompensated care in 2024, with $24 million of uncompensated care in 2024 attributed to patients from outside Hennepin County; and
WHEREAS, HHS is a teaching hospital responsible for training 31% of Graduate Medical Education trainees and 60% of Undergraduate Medical Education Trainees in Minnesota; with 71% of all learners staying in Minnesota; and
WHEREAS, HHS is home to the only Addiction Medicine Fellowship Program in Minnesota; and
WHEREAS, over 400 patients per day are seen in the addiction medicine clinic; and
WHEREAS, HHS is home to the Minnesota Regional Poison Center; and
WHEREAS, HHS providers provide advice and guidance to healthcare providers across the state, supporting and enhancing their effectiveness in providing quality care throughout a five-state region; and
WHEREAS, HHS is facing $1.7 billion in projected revenue loss over the next ten years due to the impact of federal Medicaid program changes enacted in H.R.1, including the elimination of Directed Payments which will cost HHS $1.1 billion over ten years and dis-enrollment in Medicaid resulting in an additional estimated loss of $600 million over ten years; and
WHEREAS, all healthcare systems are facing challenges and HHS’s role, as the state’s safety net hospital and as a trauma center serving pediatrics and adults, makes it uniquely vulnerable to these changes in healthcare policy; and
WHEREAS, HHS is interconnected to the statewide healthcare ecosystem and works interdependently with other healthcare facilities throughout the state, including North Memorial, the other Level 1 adult trauma center in Hennepin County; and
WHEREAS, on August 14, 2025, the Hennepin County Board of Commissioners took over interim management of Hennepin Healthcare Systems due to its worsening financial status and risk of potential closure by the end of 2025, to ensure operational continuity and to develop and implement a strategy that brings financial stability to the health care system, ensuring that residents across Hennepin County and the State of Minnesota can continue to access high-quality health care services; and
WHEREAS, on December 11, 2025, the Hennepin County Board of Commissioners adopted Resolution 25-0513, instructing the county administrator to conduct a comprehensive review of HHS governance, including identifying successful and less-successful elements of past governance, areas of needed transformation, opportunities to enhance transparency and alignment with the County, and ways to improve engagement with the community, workforce, patients/clients, leadership, and elected officials; and
WHEREAS, the County currently has a 0.15 percent ballpark sales tax that generated revenue for the construction of Target Field as a public asset for the benefit of Minnesota and the surrounding areas, and continues to provide annual funding for extended library hours and youth activities grants in Hennepin County as well as the annual operating expenses of the Minnesota Ballpark Authority.
Resolution:
BE IT RESOLVED, that the Hennepin County Board of Commissioners supports increasing the county’s 0.15 percent ballpark sales tax to 1.00 percent in order to support Hennepin Healthcare System, Inc. (HHS) as the critical safety net hospital serving Minnesota and the surrounding states; support North Memorial as a Level 1 trauma care provider in Hennepin County; continue funding for youth activities grants, extended library hours, and Minnesota Ballpark Authority operations; and maintain support for operability of Target Field as a public asset that is a first-class Major League Baseball stadium that meets industry standards.
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Background:
Hennepin County is authorized by Minnesota Statutes, Sections 473.75 through 473.763, to impose a sales and use tax to pay for certain costs associated with the acquisition, construction, financing and long-term use of a ballpark primarily as a venue for major league baseball and to make expenditures and grants for youth activities and amateur sports and extension of library hours in the County.
On August 29, 2006, pursuant to Minnesota Statutes Section 473.757, subdivision 10, and Hennepin County Ordinance No. 26, the County imposed the 0.15 percent sales tax. This ordinance imposes upon all sales made on or after January 1, 2007, the sales tax in the amount of 0.15% of the gross receipts from the sales at retail and the storage, use, distribution or consumption of goods or services that are taxable pursuant to Minnesota Statutes, Chapter 297A, that occur within the County.
To fund a portion of the costs of building the ballpark, the County issued three series of sales tax revenue bonds in the total amount of $341.8 million. Through thoughtful debt management, including refundings and early redemptions of principal of the bonds from surplus sales tax receipts, the County currently has one remaining bond issue outstanding related to the Ballpark Project. The County has the option beginning December 15, 2026 to pay off the remaining $25.6 million of principal currently outstanding.
Current statute provides equal contributions of the ballpark sales tax for youth activities grants and extended library hours with an annual inflator of 1.5 percent. Since 2007, $84.6 million has been contributed for these purposes. Current statute also provides funding for Target Field to maintain its status and operate as a first-class Major League Baseball stadium to meet industry standards.
The current proposal would increase the amount of this tax from 0.15% to 1.00%, raising approximately $342 million annually. This amount would keep funding available for all of the important purposes authorized under current law and would also provide substantial support to critical health care systems in Hennepin County.
First, and most importantly, the tax would provide critical support to Hennepin Healthcare System, Inc. HHS has been facing significant financial headwinds coming out of the pandemic with higher costs for labor, medical supplies and equipment used to provide care. The dissolution of UCare, HHS’s largest payor, at the end of 2025 placed an added financial stress on cash balances and has compounded headwinds. During 2026, HHS has relied upon the County to act as the financial backstop and has been experiencing negative cash balances since January 2026. Hennepin Healthcare System is taking steps to contain costs and identify savings but significant changes to healthcare policy at the federal level will place additional strains on HHS beginning in 2027.
Second, the tax would provide support to North Memorial Health. North Memorial operates two hospitals in Hennepin County, including one of five adult Level 1 trauma centers in Minnesota. Similar to HHS, North Memorial serves all of Minnesota and a five-state region with both its facilities and with its statewide EMS operations including air ambulance services. North Memorial faces funding pressures like those faced by HHS, and the tax will ensure its ability to provide critical services into the future as well.
recommendation
Recommendation from County Administrator: No Recommendation