Pierce County will begin to collect behavioral health tax this summer

PIERCE COUNTY, Wash. — Pierce County will begin collecting a behavioral health tax this summer.

On Tuesday, the County Council unanimously passed a pathway for the tax increase.

The one tenth of 1 percent of sales tax, or one penny for every ten dollars spent, will be collected for behavioral health education, early intervention and prevention starting in July, Vice Chair Dave Morell (R-South Hill) previously told The News Tribune.

The council approved the tax increase in December, but it’s collection was previously tied to state approval of a restructured Medicaid system in the county. A different Medicaid restructure won’t require state approval, so the tax will move forward.

“This will be good for small providers and large providers alike,” Morell said in the Tuesday council meeting.

The tax proposal was proposed three times in four years. Morell, who was the final of five votes needed for the tax increase, said in March 2020 he wanted to see how the money would be spent before he voted to approve the tax.

Morell put forth a proposal in December that increased the sales tax, included a spending plan, and put Medicaid oversight in local hands. He believes that the Medicaid change will increase services and improve behavioral health services.

The vice chair said after the state showed reservation in approving the model, service providers and the county worked to create a “phased” plan that did not require state approval.

The Washington State Health Care Authority told The News Tribune in January there were many questions regarding the overhaul.

“I wouldn’t want to say we will say no. We don’t have enough information on what they are attempting to do,” State Medicaid director MaryAnne Lindeblad said.

Before the Tuesday vote, council members Marty Campbell (D-Tacoma) and Amy Cruver (R-Eatonville) said they appreciated the work of county staff and Morell.

“While I would have preferred that we had worked within our own budgeting rather than add another tax, this is important work and I am very excited that council member Morell was able to get all of this to work,” Cruver said.


Without the legislation, Medicaid dollars flow through managed care organizations, which pay providers for Medicaid participants. The “managed care organizations,” or MCOs, are Medicaid insurance companies. They set the cost of services.

There are more than 230,000 Medicaid recipients in Pierce County and five MCOs. When a recipient visits a provider, each managed care plan has a fixed reimbursement rate for different services.

Profits made by the MCOs return to their headquarters across the country. Morell, Elevate Health and other service providers want those profits to remain in Pierce County for local services and care.

Tuesday’s vote replaced last year’s restructuring proposal for an “Accountable Care Organization” with an “Accountable Care Network.”

Both plans would keep a percentage of Medicaid dollars in Pierce County rather than return to the MCOs. But providers have to opt in to the “network,” rather than participating in a single countywide structure like an ACO.

Morell sees the “network” as a phased approach to the ultimate “organization.”

“We don’t get what the ACO would have gotten us, which is 100 percent of Medicaid participants and would eliminate the (managed care organizations),” he said. “But this gets us part way.”

The ACN creates a board of providers and elected officials. The board would re-negotiate contracts with MCOs to discuss the profits and cost of care.

A “Letter of Intent” was supported by providers who serve “more than 85 percent of Pierce County Medicaid population,” according to the bill.

Pierce County staff estimate a projected $12 million a year from the tax. Of Washington’s 39 counties, Pierce County has become the 25th to pass a one tenth of 1 percent tax increase.

The December legislation outlined how the first year of tax revenue would be allocated:

  • Mobile Crisis Intervention Response Team, $1,045,000
  • Intensive services for youth, $1,565,000
  • Expanded behavioral health services in underserved school districts, $1,565,000
  • Crisis services for adults, $1,565,000
  • Assisted outpatient treatment, $525,000
  • Recovery housing assistance, $2,085,000
  • Behavioral health services for veterans, $525,000
  • Criminal justice diversion services, $3,125,000


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