Financial woes mount at university cancer center

By The Associated Press | Posted - Dec. 26, 2014 at 2:40 p.m.

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HONOLULU (AP) — The University of Hawaii Cancer Center is facing financial problems as it tries to stay afloat.

The Honolulu Star-Advertiser reports ( ) that without help the center will deplete its reserves within two years.

Officials at the university say the money troubles stem from an outdated business model. Planners thought the center's share of the state cigarette tax would bring in close to $20 million a year. But cigarette tax revenues have been declining, and the tax is only expected to bring in $11 million in 2015.

The center ended last year with a nearly $10 million deficit. Its new state-of-the-art facility — initially expected to cost $119 million — came with an $8 million annual mortgage payment that it can't afford.

"Our challenge is that if we don't have a solution to the bond debt service, we will have — in just a little more than two years — insufficient funds to operate the Cancer Center and pay for that bond debt and maintain our programs," said John S. Burns School of Medicine Dean Jerris Hedges, who was named interim director of the Cancer Center last month. "And without that we won't be able to retain our (National Cancer Institute) designation."

Selling the center's operations and facility is seen as a last resort — an option that has support from some lawmakers but resistance from others.

To avoid that scenario, the university plans to seek a broader tobacco tax and other legislative funding this session to help repay the bond debt for its $100 million building, which opened in early 2013.

Its mission is to reduce the burden of cancer through research, education and outreach.

Lawmakers in 2006 approved legislation allocating a portion of the state's cigarette tax to help cover the center's building and operations.

"Unfortunately, from the standpoint of running a business, the cigarette sales have declined, but that's a good thing from the health standpoint," Hedges said.


Information from: Honolulu Star-Advertiser,

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