Russellville Hospital CEO address city council to participate in new Alabama rural hospital funding program

With an increasing number of Alabama’s 52 rural hospitals at financial risk, the need for additional funding from the Alabama Legislature has been largely unsuccessful. 

But a new program passed by the Legislature this year will at least provide an avenue for those rural hospitals to receive up to $750,000 each year, though the source of those funds won’t come from the state.

The Rural Hospital Investment Program Act allows a rural hospital to receive funds directly through donations made by either individuals or business, up to a capped amount each year.

The benefit for donors is a dollar-for-dollar credit off their state income tax obligation. Donors will make contributions through the official Rural Hospital Investment Program website. Donation applications are completed through this website and sent to the Alabama Department of Revenue. Donors will be able to choose their local rural hospital from the list of eligible hospitals. 

If your local hospital has met its individual cap, you may still make a donation to another eligible rural hospital on the list and still receive the state tax credit.The donation cap in 2026 per hospital is $750,000. It increases to $1,000,000 in 2027 and $1,250,000 in 2028, where it will remain.

Caps for individual donors are $15,000 per year. A married couple filing jointly has a $30,000 donation limit. Corporate caps are $500,000 and for pass through entities, $450,000 each year.

There is a catch, though, for a rural hospital to be eligible for the program. The statute states that a rural hospital shall only be eligible for assistance through the Rural Hospital Investment Program in a year where at least 10% of the assistance provided to the hospital comes from the local governing body.

That’s why Russellville Hospital CEO Chris Ware requested time to address the Russellville City Council at its December 1st meeting. The local governing body’s assistance may be in the form of direct tax revenue, budget appropriations, in-kind services or other financial assistance.

And if local governing body is already providing financial assistance to its local rural hospital, that assistance  will qualify. It doesn’t have to be new financial assistance. 

And in-kind assistance cannot count more than 5% of the total required matching funds.

Without this local match, a rural hospital is ineligible to benefit from the program.

“The Alabama Hospital Association worked tirelessly to get funds,” Ware told the council. “This program is designed to strengthen the stability of rural hospitals and these funds will help Russellville Hospital continue its vital role in the Russellville community.”

In order for Russellville Hospital to receive the maximum $750,000 assistance, the local governing body must allocate $75,000 in 2026, 10% of that cap.

“We are asking you to match that 10% amount each year,” Ware told the council. “Without it, we can’t participate in the program and receive vital assistance that’s otherwise available.”

While the council took no official action on Ware’s request, council members said they are interested in donating the 10% match. Russellville City Attorney Danny McDowell was asked by the council to research the new law and how the city would participate, and in what amount.

“This is an important program that can provide essential funding for our local hospital. I support our participation and also plan to donate personally and/or through my business,” Woodruff said. 

Although Woodruff supports the proposal, he said he would not be able to vote on it because his company has an existing business relationship with Russellville Hospital and it would  be a conflict of interest.

That’s why he plans to make a business and/or personal donation though.

For more information on the Rural Hospital Investment Program Act, visit the Alabama Department of Revenue website, www.revenue.alabama.gov.