New Jersey's 30th Legislative District

Senator Robert Singer

Senator Bob Singer

Singer Introduces Hospital Community Payment Legislation

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Senator Robert Singer introduced bipartisan legislation that would have nonprofit hospitals with for-profit facilities make payments to host municipalities to compensate for blanket tax exemptions on their property.  The bill is also sponsored by Senate President Steve Sweeney and Senator Joseph Vitale.

Sen. Robert Singer’s legislation would have nonprofit hospitals with for-profit facilities make payments to host municipalities to compensate for property tax exemptions. (SenateNJ.com)

The bill, which would update tax laws that date back to 1913, would have acute-care hospitals make payments to their home communities to offset the cost of local services.

“These hospitals are an important part of the communities they serve, providing medical care, creating jobs and contributing to their local economies,” said Senator Singer (R-Monmouth, Ocean). “We recognize and appreciate their value. These payments will help compensate for the services the hospitals receive from the municipalities, including law enforcement and firefighters. The hospitals have worked with us in a cooperative way to craft this legislation.”

The legislation, entitled the Hospital Community Service Contribution Bill, would have non-profit hospitals that have for-profit operations make Community Service Contributions directly to their municipalities. The payment formula would be $2.50 per day for each hospital bed and $750 per day for each facility providing Satellite Emergency Care.

The municipal payments would be dedicated to property tax relief and for public safety, such as police, fire and emergency services. Five percent of the payments would be sent to the county where the hospital is located, according to the bill.

Any voluntary contributions by the hospitals would be deducted from the community service payments and any hospital that is losing money could apply for an exemption from the payments.
The legislation would also establish the Nonprofit Hospital Community Service Contribution Study Commission to evaluate the success of the new system and make recommendations for any needed improvements.

“The health care industry has changed substantially over the years with hospitals engaged in a broad range of activities and services,” said Senator Sweeney. “There is also a dramatic increase in competition among other hospitals and with other health care providers. The business has changed, but the tax laws have not. This legislation will have the hospitals pay their fair share while at the same time preserving their tax-exempt status.”

“The fact that the payment formula sets a reasonable payment schedule that is predictable and consistent is a benefit for the hospitals and the municipalities, eliminating uncertainty and unpredictability,” Senator Vitale said. “The acute care hospitals provide a wide range of medical treatment and health care for a growing number of people. We recognize and respect their value to their home communities and the entire state.”

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