Oregon legislators balked Thursday at loaning $50 million in federal money to rural hospitals reeling from the coronavirus pandemic.
Members of the Legislative Emergency Board tabled the proposal so it could be reworked to include forgivable loans or straight-out grants. Several legislators said hospitals would be unable to take out loans, even at zero percent interest for the first year as Gov. Kate Brown has proposed, and the allowable uses were too restrictive.
“This was federal money given to us to pass on to our rural hospitals. Why are we making it a loan program as the state?” asked Sen. Bill Hansell, R-Athena. “It’s wrong. It’s morally incorrect in my opinion. This money should be grants from the beginning. In that way, we could actually help our rural hospitals.”
Thirty-three rural hospitals would be eligible. But Sen. Betsy Johnson, D-Scappoose, said the plan envisioned by Brown’s staff was the equivalent of throwing only a 6-foot rope to someone drowning 10 feet offshore.
“We would look so incredibly foolish if we allowed hospitals to go broke on our watch during a global pandemic,” Johnson said. “But there is all kind of stuff wrong with what the governor’s folks have written.”
House Speaker Tina Kotek, D-Portland, noted that some hospitals are getting federal assistance, with Congress approving additional funding this week.
“I think we want to be cautious about how we don’t just unilaterally say everybody needs, frankly, free money,” she said, “because there are a lot of businesses and a lot of places around the state that need that money, too.”
After a recess, Senate President Peter Courtney, D-Salem, called for tabling the proposal, saying Brown’s staff agreed with that move. No date was set for when the Emergency Board would take up the issue again.
The board did approve coronavirus-related funding for rental assistance, small businesses, domestic violence resources, COVID-19 testing for workers in long-term care facilities and aid to jobless workers, such as undocumented immigrants, who are ineligible for unemployment insurance.
Many of the details have yet to be worked out. Legislative Fiscal Officer Ken Rocco told the Emergency Board, which for the first time was meeting by video conference, that it remained unclear how much federal aid Oregon was getting and what restrictions accompanied the money.
Hospital officials from across the state had told legislators earlier in the week that hospitals cumulatively were losing $13 million a day due to the costs of COVID-19 equipment, a state ban on nonurgent surgeries, fewer people receiving care in emergency rooms and other factors. More than 30,000 Oregon workers in the health care and social assistance fields have applied for unemployment since March 15.
Oregon Health & Science University announced Thursday that it was substantially reducing salaries and making other cutbacks to deal with a projected revenue loss during the next 28 months of $1 billion to $1.4 billion.
“It is not just the rural hospitals that are struggling,” Sen. Elizabeth Steiner Hayward, D-Beaverton, who is a physician at OHSU, told her Emergency Board colleagues. “Every single health system in the state is struggling as a result of this.”
Brown announced Thursday that, as of May 1, she was lifting the ban on elective medical and dental procedures. Steiner Hayward said that would help, but hospitals would take time to ramp up and have lost significant income in the meantime.
The board approved the 11 items on its agenda, all on a bipartisan basis and most of them unanimously. Much of the discussion centered on fiscal accountability for how relief money is spent and ensuring that rural areas benefit.
Legislators approved a new program under which businesses employing 25 or fewer workers could be eligible for state grants or loans if they have not received federal aid.
Rep. David Gomberg, D-Otis, said he had been concerned that coronavirus assistance had not been going to the smallest of small businesses, which are the economic backbone of his district.
“People are hurting everywhere,” he said. “According to the state economist, they’re hurting particularly hard in my part of Oregon.”
The state will contract with community development financial institutions to run the program, but Gomberg noted those institutions primarily are along the Interstate 5 corridor.
“I worry that it’s not going to support everyone equally,” he said, “that perhaps we’re focused on helping the most people rather than people who are hurt the most.”