Veto Prompts Scramble to Guard Nonprofit Hospitals’ Tax-Exempt Status

Source: NJ Spotlight
Sponsors and advocates of a bill requiring nonprofit hospitals to start paying fees to their host communities say they’ll waste no time getting back to work — now that the measure has fallen victim to Gov. Chris Christie’s pocket veto. Time is of the essence, they say, because dates for municipal property-tax assessments and appeals are looming.
The goal for all involved is to head off potentially costly lawsuits in communities throughout the state, much like the one that successfully challenged Morristown Medical Center’s tax-exempt status. In that case, Morristown officials argued in state tax court that the hospital should lose its tax-exempt status because some for-profit services — including those offered by self-employed doctors operating at the facility — had become too entangled with the hospital’s overall operations. After the judge ruled against the hospital, medical center officials struck a deal with Morristown that resulted in nearly a quarter of the medical center’s property now being subject to local property taxes.
The legislation would have preserved the property-tax exemption for nonprofit hospitals, but also required them to begin paying a $2.50 per-bed daily fee, with a 2 percent annual adjustment to account for inflation, to their host municipalities. In addition, a $250 per-day fee would be levied for satellite emergency-care facilities. The bill also would have created a special study commission to look at the issue more closely in the coming years. But Christie, a second-term Republican, last week rejected the bill and dozens of others that lawmakers sent to him in the very final hours of the last two-year legislative session.
When asked about the pocket veto last week, Christie spokeswoman Joelle Farrell offered a general comment on the Legislature’s efforts at the end of the last session. “Having the Legislature pass more than 100 bills in such a hasty and scrambled way, praying for them to be rubber stamped, is never a good formula for effectively doing public business,” Farrell said.
With a new session now underway, Sen. Robert Singer (R-Ocean) said he’s committed to working with the Christie administration, hospital representatives, and others to ensure a legislative solution can still be reached — “We need to diligently work together to find a uniform and equitable way forward that works for both hospitals and municipalities.”
Senate President Stephen Sweeney, another primary sponsor, also pledged to “continue to work with everyone involved to develop a workable solution. The needs of New Jersey residents won’t go away with this veto,” said Sweeney (D-Gloucester).
The final version of the bill that made it out of the Legislature on January 11 had the blessing of the Hospital Association. Betsy Ryan, its president and chief executive, said organization officials are now reaching out to the Christie administration to see what, if any, problems it had with the bill before taking any other steps forward.
Michael Darcy, executive director of the League of Municipalities, agreed with Ryan on the sense of urgency, though his organization still harbors some problems with the bill that Christie ultimately rejected.

Quest Diagnostics to manage labs for Barnabas Health hospitals
Christie Blames Michelle Obama's Healthy Eating Initiative on Less Appetizing School Lunches