Bipartisan legislation sponsored by Senator Robert Singer that would have nonprofit hospitals with for-profit facilities make payments to host municipalities to compensate for blanket tax exemptions on their property was approved by a Senate committee. S-3299, which is also sponsored by Senators Steve Sweeney and Joe Vitale, 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.
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)
“This plan that was developed with the hospitals’ input is a fair way to compensate host municipalities for the services hospitals use,” said Senator Singer (R-Monmouth, Ocean). “These hospitals provide critical services to our communities and are a significant economic engine in the areas they serve. We rely on their continued future success under this community payment plan.”
“This bill recognizes the significant changes that have taken place in the health care industry, including the competition among hospitals and the broad range of services they provide,” said Senator Sweeney. “The business has changed, but the tax laws have stayed the same. This will have the hospitals pay their fair share while at the same time preserving their tax-exempt status.”
“The acute care hospitals provide a wide range of valuable health care services to their home communities and to the residents of New Jersey,” said Senator Vitale. “Providing them with a payment formula that sets a reasonable schedule ensures predictability and consistency for the hospitals and their host municipalities so they can continue to best serve their needs.”
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 acute care hospital bed and $250 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, approved by the Senate Budget and Appropriations Committee, 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.