N.J. towns may push hospitals to pay up; more could seek property tax deals with non-profits
NOVEMBER 11, 2015, 11:14 PM LAST UPDATED: WEDNESDAY, NOVEMBER 11, 2015, 11:22 PM
BY LINDY WASHBURN
STAFF WRITER |
THE RECORD
Cash-strapped local governments around the state may be looking at non-profit hospitals with new eyes, now that the non-profit Morristown Medical Center has agreed to pay its hometown $15.5 million over the next decade to settle demands for property taxes.
A judge in state tax court took away the hospital’s property-tax exemption in June, declaring that it operated more like a for-profit company than a charitable institution. Rather than appeal the decision, the hospital negotiated an agreement with the town, which was approved Tuesday night.
“Clearly, this is an open invitation for a number of towns,” Frank Ciesla, head of the health-law practice at Giordano, Halleran & Ciesla, said Wednesday. “I think you’re going to see a lot more in the way of litigation.”
Non-profit hospitals are among the largest landowners in some municipalities. Local governments could begin by assessing taxes on their property, leading to a series of appeals as hospitals seek to clarify their status, he said.
The Valley Hospital’s tax liability would be $4.5 million in Ridgewood if its main campus was not exempt, and $360,000 in Paramus, according to local records. (It already pays taxes on some other properties.) Hackensack University Medical Center reached a settlement this year of various tax issues that is to result in a $5.1 million payment to the city treasury over three years. Holy Name Medical Center in Teaneck, Englewood Hospital and Medical Center and St. Joseph’s Healthcare System’s hospitals in Paterson and Wayne all are exempt from local property taxes.
Ridgewood Mayor Paul Aronsohn said that it hasn’t been possible to raise the issue of taxes — or a payment in lieu of taxes — with Valley during the last few years because of the hospital’s pending application for approval of its building plans.
Maybe be Valley might/could be having second thoughts about the expansion with the distinct possibility of a considerably higher appraisal from an original tax basis of zero, no less.
PJ, don’t want to hijack this thread, but this has been asked before: Is our current Mayor and VC interested in ANY tax revenue or PILOT payments from Valley Hospital? What say you?
Not one member of the current Council has raised this issue public ally – not one. The Valley expansion plans have been rejected… Twice. Time for them to pay their fair share of Village taxes, using the gift wrapped Morristown precedent. If the current Council and VM cannot understand this, we will elect and appoint officials who can. Shameful lack of fiduciary responsibility to Village taxpayers, shame on our Council
Anon, sound like the current Mayor has no interest, but not one of the other four had raised the issue publicly either. Shame on them all.
They can pay Audrey $2mn+ a year but the Village gets no property taxes or payment in lieu of Village services provided? This is nothing but a scam.
Can only assume Paul just doesn’t understand the issue if he’s implying that there is some sort of quid pro quo between paying their fair share for Village services and their twice rejected application for approval of excessive building plans? Where is the VM and Village lawyer on this?