- Associated Press - Wednesday, July 15, 2015

LITTLE ROCK, Ark. (AP) - Crittenden County voters approved a temporary sales tax increase of 1 percentage point to help reopen a hospital that closed last September because of money problems.

The proposal approved in a special election Tuesday raises the county’s sales tax rate from 1.75 percent to 2.75 percent. County Judge Woody Wheeless said voter turnout was low, but those who did cast ballots overwhelmingly backed the tax hike, with 2,846 people voting in favor and 439 voting against it.

“I think what I walked away with is that it’s obvious the people of Crittenden County want a hospital here,” Wheeless said. “None of this money goes toward any debt. And none of this money goes toward day-to-day operations at the hospital.”

He said residents have been travelling to Jonesboro and Forrest City, or crossing state lines to South Haven, Mississippi or Memphis to seek medical treatment.

The tax increase will take effect in November and will expire after five years, Wheeless said. It is expected to raise about $30 million, which will go toward paying for the hospital’s upkeep and other expenses.

The county has been negotiating with Ameris Health Systems, which is based in Nashville, Tennessee, to take over operation of the hospital. After the tax expires, Ameris would pick up the expenses covered by the tax.

The hospital’s former owners declared bankruptcy and it closed its doors last September, records show. Wheeless said the bankruptcy trustees still have to settle out about $7 million in secured debt that used the property as collateral before the agreement with Ameris to can move forward.

“Once that happens probably by the end of next month, the title to the property will be free and clear,” Wheeless said.

The former operators also have about $30 million in unsecured debt that didn’t offer the property as collateral. Former employees have also filed lawsuits against the former administrators alleging that as the hospital fell further into debt, they withheld money from workers’ paychecks and neglected to pay health insurance premiums.

Nearly 400 people worked at the West Memphis hospital before it closed. Wheeless said the new operators plan to start smaller, with maybe 100 staff members, and to expand if and when it’s needed. He said it will take about six months for the hospital to be fully operational, so it may reopen in January.

“They’ve already had about 200 people reach out asking about employment, and that’s before they even asked for the first resume,” he said.

In June of last year, Crittenden County voters approved a similar sales tax measure that was aimed at keeping the hospital open after a small fire broke out earlier that month and temporarily closed the facility. The tax was never collected because of the operators shutting it down in September, and voters repealed that tax in October of last year.

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Follow Claudia Lauer on Twitter at https://twitter.com/ ClaudiaLauer

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