Hospital News Feed
| Hospitals not paying fair share, group says |
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The Boston Globe, January 21, 2009 - Boston's major hospitals could and should play a significant role in easing the city's budget crisis, according to a new report by an advocacy group finding that the institutions pay only a fraction of the cost of providing police, fire, and other services to the $2.4 billion in property the tax-exempt charities own. Community Labor United, a coalition of union and activist groups, found that the city's eight biggest teaching hospitals would have owed $64.2 million in city taxes in 2007 if their land and buildings had been taxed like commercial property. Instead, the hospitals made voluntary payments to the city of just $4 million in 2007, a year when they collectively had profits of more than $750 million. "They're not paying their fair share," said Mary Jo Connelly, director of research for Community Labor United, whose members include a union seeking to organize city hospital workers. "In a time that everyone is sacrificing, it's time for them to step up and start addressing these shortfalls. We know there are going to be significant layoffs of teachers, police, Fire Department personnel, and that sort of thing. If they paid only 25 percent [of the property tax rate], we could save 115 firefighters" from layoff. But hospital officials contend that Community Labor United greatly underestimated how much the teaching hospitals already contribute to the city, including $175 million in community programs last year such as clinics that serve low-income patients. In addition, the hospitals attract more than $1 billion a year in federal research money and provide free care to people who cannot pay on their own. "I would argue that these community benefit programs are filling a void that the city would otherwise have to," said John Erwin, executive director of the Conference of Boston Teaching Hospitals, which represents about a dozen medical centers. The report, "The Non-Profit City," was released as government revenues are plummeting due to the economic downturn and as Boston politicians look for ways to generate more income from hospitals, universities and other tax-exempt institutions that collectively own more than half the property in Boston. Mayor Thomas M. Menino, who has said the city faces a $140 million budget shortfall, announced last month that he is forming a task force aimed at increasing the voluntary payments by hospitals and universities, called "payments in lieu of taxes," or PILOTs. Connelly's group includes the Service Employees International Union, which is attempting to organize city hospital workers. The report's analysis focused on big hospitals, including six of the 10 biggest employers in Boston: Massachusetts General Hospital, Brigham and Women's Hospital, Beth Israel Deaconess Medical Center, Tufts Medical Center, Boston Medical Center, and Children's Hospital. Also examined by the group were the Dana-Farber Cancer Institute and Caritas St. Elizabeth's Medical Center. Under state law, the city cannot force nonprofit hospitals to pay property tax, but for decades Boston has negotiated voluntary payments from hospitals, often in exchange for approval of expansion or construction plans. City officials have argued that hospitals should pay at least 25 percent of the property tax rate to cover the cost of providing city services. Hospitals vary enormously in the payments they make, ranging from several hospitals that paid 2 percent or less of the commercial property tax rate to Brigham and Women's Hospital, which pays 26 percent of the commercial rate. Altogether, the teaching hospitals made payments equal to 6 percent of the commercial tax rate, Community Labor calculated, far below the city's 25 percent goal. Councilor Stephen J. Murphy, who for six years has pushed to have nonprofit institutions pay more into city coffers, said he welcomed the support of Community Labor. He said that several members of the City Council have strongly backed his efforts, but that he has struggled to build broader support outside council chambers. "We know that [the hospitals] are major employers, but you're not paying your fair share and your bottom line bears us out," said Murphy, who expects to be named to Menino's task force on nonprofits. But hospital officials said that now is not a good time to ask more from the hospitals, which have problems of their own. Through the first three quarters of 2008, the eight hospitals analyzed in the report have seen profits drop by more than 50 percent, according to state figures. By Scott Allen, Globe Staff Source: http://www.boston.com/news/local/massachusetts/articles/2009/01/21/hospitals_not_paying_fair_share_group_says/ © Copyright 2009 Globe Newspaper Company. » Post Comment
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