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January 05, 2016

N.J. Hospital Group Backs Plan for Fees in Lieu of Taxes

An umbrella group representing New Jersey's 62 nonprofit hospitals has endorsed legislation that would require the medical centers to make annual payments for local government services, reports the Press of Atlantic City.

The bill would preserve nonprofit hospitals' tax exemptions while setting fees of $2.50 a day for each acute-care bed in a facility. The money would be earmarked for public-safety expenditures such as police and fire protection or for public tax relief. Hospitals in financial straits could apply for exemptions.

The measure was introduced last month in the wake of a June Tax Court decision that held a Morristown, N.J., hospital liable for property levies because it significantly intertwined nonprofit and for-profit activities. The ruling triggered speculation that strapped municipal governments would seek to collect millions of dollars in taxes from nonprofit medical institutions.

"Ever since the Morristown Tax Court case there has been a great deal of uncertainty with hospitals and municipalities about what it means," said Betsy Ryan, president and CEO of the New Jersey Hospital Association, which voted shortly before Christmas to back the bill. "We need to get this resolved, put behind us."