Wyoming hospital districts face ‘painful’ funding drop with property tax cut

To say things are hectic for the Sublette County Hospital District is an understatement. 

The district is just months out from opening a brand-new hospital in Pinedale, and the list of tasks is daunting, district board chair Tonia Hoffman said. For starters: ensure construction is complete, onboard doctors, move long-term-care residents, set up payment and billing systems, install furniture, hire nurses.

“We’re kind of deep in the throes of trying to get everything ready to go,” Hoffman said. 

Amid the myriad tasks involved in opening the county’s first hospital by July 1, it wasn’t exactly welcome news to discover a new state law will impose a significant cut in property taxes, she said. The district earns revenue from a mill levy, which pulls from those taxes. The mill levy equated to $12.4 million in 2022-2023 for the hospital district.

Senate File 69, “Homeowner property tax exemption,” will apply a 25% exemption on the first $1 million of a single-family home’s fair market value, which will translate into a smaller pool of funds for the Sublette County Hospital District to draw from. The district is far from alone. 

“It will have an unfortunate effect, I think, on every small rural hospital in the state,” Hoffman said. 

Wyoming’s 15 hospital districts, along with hundreds of other special districts and local governments that get revenue from a portion of property taxes, are now confronting funding cuts. These districts include services for cemeteries, housing authorities, irrigation, recreation, fire protection and rural health. 

Though exact numbers won’t be clear until properties are reassessed — an annual task typically finalized in June — districts expect some hard choices as they determine how to stretch shrinking funds. With rural health care providers already facing steep challenges, some say, the cuts could topple a precarious fiscal balancing act.

In Pinedale, Hoffman said, the hospital district is relatively insulated by its mix of funding sources. But in combination with other recent and potential changes aimed at taxes, she said, the overall effects are concerning.

“We’ve [already] been preparing for months on where we can cut, and where we can save,” she said. 

Taxpayer relief squeezes districts 

In response to sharply rising home values in several counties and correlated spikes in tax bills, Wyoming lawmakers passed five homeowner relief bills in 2024. Gov. Mark Gordon approved all but one. 

In 2025, lawmakers brought another round of property-tax relief measures to the Legislature, with many noting that property tax burden was the loudest voter concern they heard. Bills included Senate File 69, which originally proposed to apply a 50% exemption on the first $1 million of assessed value for single-family homes for the next two years.

Dozens of special district representatives, including first responders, urged lawmakers to reconsider given the drastic service cuts the measure would require due to millions of dollars in lost revenue. They argued that many taxpayers don’t realize property taxes don’t fund state government, but instead pay for local services like senior centers and law enforcement. 

Special districts do this through voter-approved mill levies, which are tax rates applied to the assessed value of a property. One mill is equal to one dollar per $1,000 of assessed value. Depending on the district, the aggregate of an assessment of 1 or 2 mills could generate enough funds to help support annual operations. 

Legislators tussled over Senate File 69 at great length, debating the level of cuts and whether the state should offer relief to communities by backfilling the lost revenues. In the end, they agreed to the 25% cut with no backfill. Gordon signed that bill into law March 4. 

“This act, coupled with the bills I signed last year, responds to the call for property tax relief,” Gordon said in a news release. “Now the practical impacts of this legislation will need to be navigated by our cities, counties, special districts and citizens.”

Rural health care fragility

Wyoming hospitals are already in precarious positions, Wyoming Hospital Association Vice President Josh Hannes said, due to the challenges of operating rural health care facilities. Low patient volumes, administrative burdens from insurance companies, high rates of uninsured patients, rising labor costs and increasing prescription drug prices create a difficult landscape for financial sustainability, he said. 

Senate File 69 further jeopardizes the state’s health care network, said Hannes, who lobbied against the bill during the session. While the measure may seem like a win for property owners, Hannes wrote in a February op-ed, “the reality is such an exemption would have devastating consequences for Wyoming communities.”

Mill levies fund critical services and facility upgrades for the state’s 15 special hospital districts, supporting not just hospitals but also senior living facilities, he noted. 

Cutting property taxes “could force many of these already vulnerable institutions to make painful cuts, potentially reducing essential healthcare services in rural areas where access is already limited,” Hannes wrote.

Wyoming has eight hospitals “at risk of closing,” according to a recent Center for Healthcare Quality and Payment Reform report. 

Hannes was not sure how the report qualified “at risk” but said every one of Wyoming’s 19 “Critical Access Hospitals” — small, rural hospitals with 25 or fewer beds located at least 35 miles from another hospital — operated at a loss in 2023. 

“I think it’s fair to say all of our hospitals are at risk,” he told WyoFile. 

Of Wyoming’s 15 hospital districts, Hannes said, 12 districts operate those “Critical Access Hospitals.”

“When you take 25% of the residential tax revenue away from those, that’s going to be an issue,” he said. The challenge will be widespread. 

“Every other governmental entity that receives that revenue is going to have to make some pretty tough decisions about what portions of their services could they maintain,” Hannes said. 

Austerity planning? 

Reserves and other financial streams will factor into how hospital districts will deal with cuts.

The Teton County Hospital District was established in 1976 to oversee St. John’s Health in Jackson. The district is authorized to levy up to 6 mills annually but has levied 3 since the district’s creation. That equated to roughly $12.3 million in 2024, according to county records. 

Like Hoffman, St. John’s Chief Communications Officer Karen Connelly noted the convergence of national, local and state headwinds “challenging the sustainability” of Wyoming medical centers like St. John’s. 

“Senate File 69 is one,” Connelly told WyoFile in an email. Others, she said, include pressure on workforce wages due to the high cost of living in Teton County and the shift in payer mix toward Medicare due to an aging population, which affects reimbursement rates. 

“For context, the annual mill levy support has roughly equaled the cost of unreimbursed care we provided our patients,” Connelly continued. “A reduction in that support, along with the other challenges I’ve noted, will require us to reduce costs where we can and evaluate our services and programs in order to remain sustainable.” 

The hospital district is just beginning to develop its budget for the next fiscal year, which begins July 1. “The budget we develop … will account for an expected reduction in mill levy funds as well as the other challenges I described,” Connelly wrote. 

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Albany County Hospital District operates Ivinson Memorial Hospital in Laramie, which has served the community for nearly a century. The district levies 3 mills on county voters, which amounted to $2.2 million during the last fiscal year, Ivinson Memorial Hospital CEO Doug Faus said. The amount has been growing steadily for about a decade, he added. Because the hospital has produced a profit in recent years and has employed careful fiscal management, he said, “we’ve been able to put money in the bank and save it, you know, for things like this.”

The hospital uses the mill levy funds for charity care, he added. “So any citizen in our county who doesn’t have the ability to pay, that’s what that money is used for.”

And while Faus doesn’t see the property tax cuts forcing any major service cuts at Ivinson, he is also keeping a close eye on the swirl of health care changes on the horizon, including federal efforts to cut Medicaid and Medicare. 

“We save money for a rainy day because we know the rainy day is coming — and it looks like the clouds are forming,” Faus said. 

Budgeting surprises

In Pinedale, where the hospital district has worked for years to reach the construction stage, the path has already been littered with challenges.

The Sublette County Hospital District operates clinics in Pinedale and the Big Piney/Marbleton area, but the county is the only one in Wyoming without a hospital. The district in 2020 asked voters to increase the mill levy with the express intent to create a new district to build a hospital, and the measure passed by a large margin. That levy was $4.8 million in 2021/22, and jumped more than 150% to over $12 million the following year, according to the district’s annual report. 

The vision is a 10-bed, 40,000-square-foot hospital, with a similarly sized attached long-term care facility. It’s an ambitious project, however, and has relied on the levy along with private donations and other county contributions. 

Hoffman, too, cited other recent changes, such as a 2022 deferred repayment plan that allows mineral companies more time to repay taxes. That means the district based early feasibility studies on funds that aren’t immediately available.

“I think that across the entire state, all of the hospitals are in the same situation, and we’re all going, ‘OK, how do we pivot and figure out how to work against this, or how to maintain our revenues when this is going to be a really challenging time,” she said.