Dramatic Drake Center recovery vindicates Phil Heimlich

In 2005 and 2006, Commissioner Phil Heimlich and COAST founder Chris Finney fought a valiant and successful battle to remove Drake Center from the public dole. Now, the Cincinnati Enquirer has documented a dramatic turnaround at Drake, vindicating their free-market position. Read the Enquirer story here.

At that time, big-spending Todd Portune, who was also a Drake patient with significant debt owed to the institution, championed $14 million in continued annual spending for the wasteful institution.

Then-Chairman of the Tax Levy Review Committee, Chris Finney, carefully documented Drake’s bloated executive salaries, and costs that were 70% higher than similar institutions.

Ultimately, as a result of the persistence of Finney and Heimlich, and with the support of Commissioner Pat DeWine, Drake was privatized – selling it to the Health Alliance – and the buyer agreed to sunset tax subsidy in 2009.

Despite this liberation of the tax burden from Drake, until earlier this year, Portune advocated for a renewal of the multi-million dollar annual subsidy, and even asked hospital officials to demand more tax monies going forward. Fortunately, Drake declined the offer.

The Cincinnati Enquirer story thoroughly documented Drake’s success even as its tax subsidy is being removed. In its story entitled “Drake’s back in financial health,” reporter Cliff Peale documented Drake’s turnaround from a $10 annual loss, to a $9 million annual surplus, and increased revenues from $68 million in 2005 to $100 million today.

“Ending the taxpayer subsidy to a bloated and mis-managed Drake Center is a great success story for COAST and for Hamilton County taxpayers,” said COAST Chairman Jason Gloyd. “Every single establishment organization in Cincinnati rushed to their defense and to higher taxes and spending and they were proved dead wrong. Our thanks go to Phil Heimlich and Chris Finney for their courage and persistence in this fight.”

The defenders of Drake’s wasteful spending

The Drake battle was also instructive about why Cincinnati and Hamilton County simply will never become competitive in terms of tax structure for residents and businesses: In 2005, the wasteful Drake levy was endorsed by the Greater Cincinnati Chamber of Commerce, United Way, the Enquirer, the Post, the Business Courier, and other reliable advocates of big government.

The Enquirer’s editorial page this year, in begrudgingly acknowledging that Drake now does not need taxpayer subsidy said: “The privatization not only stabilized the care center, it saved it.” That’s quite a turn-around from its shameful 2005 endorsement of the bloated levy. Read the new Enquirer editorial here.

Here were some of the other voices in favor of continual wasteful spending at that time.

Cincinnati Business Courier:

“We … see no reason why voters shouldn't support this levy”

Greater Cincinnati Chamber of Commerce:

“The Greater Cincinnati Chamber of Commerce today announced that its Board of Directors has formally endorsed the Drake Levy….The Board was impressed by the Drake Center’s commitment to continuous improvement in both its quality of care and fiscal management.”

Todd Portune:
“The Health Alliance cannot absorb Drake and make everything work while guaranteeing the full mission of Drake.”
“Those who are arguing, 'No money now, just cut them off completely,' will kill this facility."
After the sale was conclude and the tax subsidy ended: “An arrangement where no levy can be asked for compromises the long range viability of the institution”

Cincinnati Post:

“there's no question the loss of the levy, which accounts for about 20 percent of Drake's operating budget, would be traumatic.”

Drake Chairman Joseph Steger:

“If it fails, the hospital might have to close.”

Of course, to a man, these endorsements of the bloated tax, and the predictions of doom and gloom if it ended, were simply and completely wrong.

Predictably, many of these same forces came out in favor of the Super-Sized Jail sales tax increase, the Light Rail levy, and almost every single other bad idea to come down the pike in Cincinnati and Hamilton County. “Because the same story continues to repeat itself,” said COAST Chairman Jason Gloyd, “the era when Cincinnati was once competitive for jobs and residents appears long lost.”