Christie ve­toes N.J. bill on hos­pi­tal tax ex­emp­tions

Modern Healthcare - - REGIONAL NEWS - —Lisa Schencker

New Jer­sey hos­pi­tals fear that Gov. Chris Christie’s veto of a bill man­dat­ing that not-for-profit hos­pi­tals con­trib­ute to lo­cal mu­nic­i­pal­i­ties in­stead of pay­ing prop­erty taxes could lead to years of ex­pen­sive le­gal ac­tion.

They hope to cre­ate new leg­is­la­tion that will have a bet­ter chance of pass­ing in com­ing months, and in turn avoid more law­suits in­volv­ing mu­nic­i­pal­i­ties look­ing to pur­sue prop­erty taxes from lo­cal hos­pi­tals.

Betsy Ryan, CEO of the New Jer­sey Hos­pi­tal As­so­ci­a­tion, said if ev­ery­one can’t come to­gether on new leg­is­la­tion, “We’ll see … years and years of costly lit­i­ga­tion.”

The veto rep­re­sented yet another set­back for not-for-profit hos­pi­tals, which are com­ing un­der in­creased scru­tiny na­tion­wide for their prop­erty tax ex­emp­tions.

The bill was drafted af­ter a state tax court in June pulled Mor­ris­town (N.J.) Med­i­cal Cen­ter’s prop­erty tax ex­emp­tion, say­ing it op­er­ated in many ways like a for­profit busi­ness. The hos­pi­tal ended up set­tling with the city for $26 mil­lion, but the judge’s rul­ing wor­ried other not-for-profit hos­pi­tals in the state.

The bill Christie ve­toed would have al­lowed hos­pi­tals to keep their tax ex­emp­tions as long as they paid their mu­nic­i­pal­i­ties $2.50 a day for each hos­pi­tal bed and $250 a day for satel­lite emer­gen­cy­care fa­cil­i­ties.

Christie spokes­woman Joelle Far­rell said the gov­er­nor’s of­fice is not com­ment­ing on spe­cific bills, but in a state­ment on the lame­duck ses­sion in which the bill was passed, she said the Leg­is­la­ture’s votes were “hasty” and that law­mak­ers had hoped for them to be “rub­ber-stamped.”

Some have spec­u­lated that Christie didn’t sign the bill be­cause it could be con­strued by some— amid his bid for the pres­i­dency—as a tax in­crease. But Michael Darcy, ex­ec­u­tive di­rec­tor of the New Jer­sey State League of Mu­nic­i­pal­i­ties, which op­posed the bill, agreed that the leg­is­la­tion was rushed. He said stake­hold­ers need to now work on a “ra­tio­nal ap­proach” to deal­ing with the is­sue. He said any fees paid by hos­pi­tals to mu­nic­i­pal­i­ties should be “sub­stan­ti­ated.”

New Jer­sey Gov. Chris Christie

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