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Hospital and Other Special District Taxes
Purchaser: Special Districts
Program: Property and sales tax supported programs

Description: Special districts are political subdivisions of the state and can address needs in limited geographic areas. Many districts have quasi-governmental powers with authority to tax, issue bonds and incur debt. Special districts with health care functions include hospital districts, health services districts, and emergency services districts.

Hospital Districts
A hospital district must be approved by the voters, and each district can determine eligibility standards and services to be provided. The hospital district has the authority to impose property taxes annually in an amount not to exceed the limit approved by voters, and in no event in excess of 75 cents on each $100 valuation of all taxable property in the district. The district may also chose to levy a sales tax.

Some hospital districts do not levy taxes, but 132 districts reported nearly $730 million in property taxes for fiscal 1998. Eight Texas hospital districts levied more than $17 million in sales taxes in fiscal 1998.

Emergency Services Districts
Emergency services districts, with some exceptions, may adopt a property tax at a rate not greater than 10 cents on each $100 of taxable value. The maximum rate may be as low as 3 cents. Emergency services districts also may levy sales taxes as long as the new combined local sales tax rate would not exceed 2 percent at any location within the district.

Fifty-four Emergency Services Districts levied more than $26 million in property taxes in fiscal 1998. Two Emergency Services Districts levied $140,591 in sales taxes in fiscal 1998.

Health Services Districts
A few Texas counties have established a county health services tax which became effective April 1, 1998. A county is eligible to adopt the health services sales tax if it has a population of 50,000 or less and if the new combined local sales tax rate would not exceed 2 percent.

Revenue from the tax may be used only to provide health services in the county. The county may allocate all or part of the revenue to a county hospital authority or a hospital district that has the same boundaries as the county, or to a public health district in which the county participates. Several districts use it to pay for ambulance services for elderly and ill rural county residents, other emergency medical services or for more general public health services. Others turn the tax revenues over to the hospital authority or county hospital for their use.

Seven Texas health services districts levied nearly $2 million in sales taxes in fiscal 1998.

Texas Total, Fiscal 1998
  Levied Number
Property Tax
Hospital Districts $729,815,764 132
Emergency Services Districts $ 26,134,052 54
Subtotal $755,949,816 
Sales Tax
Hospital Districts $17,234,620 8
Health Services Districts $ 1,977,911 7
Emergency Services Districts $ 140,591 2
Subtotal $19,353,122 
Total $775,302,938 

Source: Carole Keeton Rylander, Texas Comptroller