New Jersey's nonprofit hospitals moved closer to paying local fees to help pay for public safety services
TRENTON -- New Jersey's nonprofit hospitals moved closer to paying local fees to help pay for public safety services and reduce property taxes, under a bill approved by Senate and Assembly committees Thursday.
The Hospital Community Service Contribution legislation is based on a tax court ruling last year that found Morristown Medical Center operated largely as a for-profit hospital, making it subject to property taxes. The two sides settled on an agreement that will require the hospital pay the town $15.5 million over the next 10 years.
About 85 percent of New Jersey's 72 hospitals are non-profits and therefore exempt from paying property taxes. But as hospitals have grown larger through consolidations and adding outpatient services, they've increased their reliance on police, fire and other municipal services.
N.J. non-profit hospital 'tax' advances in Senate
Hospitals would pay the municipality that hosts them $2.50 per day for each hospital bed and $250 per day for each satellite emergency care facility, according to the bill, (S3299).
Both the Assembly and Senate Thursday agreed to add a 2 percent annual inflationary increase, after local officials complained the fee was too small.
Michael Cerra of the League of Municipalities told the Assembly Appropriations Committee he appreciated 2 percent bump. "We simply don't believe we are there yet."
Newark City Councilwoman Gayle Chaneyfield Jenkins released a statement before the hearing urging lawmakers to seek a better deal for local property tax payers.
"My job on the City Council is to look out for the taxpayers," she said. "I cannot in good conscience sit back and not speak out about a bill that is not a good deal for the taxpayers of this city."
Betsy Ryan, president and CEO of the the New Jersey Hospital Association, the industry's largest lobbying group, acknowledged "we are big users of municipal services" said said she believed the bill is a way "to bring balance and an equitable solution for both parties."
The full Assembly and Senate are expected to vote on the bill Monday and send it to the governor.
"This bill recognizes the significant changes that have taken place in the health care industry, including the competition among hospitals and the broad range of services they provide," said Senate President Stephen Sweeney (D-Gloucester), one of the bill's prime sponsors. "The business has changed, but the tax laws have stayed the same. This will have the hospitals pay their fair share while at the same time preserving their tax-exempt status."
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.
