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Wednesday, April 15, 2015

Ind. Gov't. - Budget bill includes tax break for for-profit hospitals

John Scheibel reports in a long story the NWI Times that begins:

A small section of a larger piece of legislation, which would cut in half a portion of property taxes for some hospitals, has some Porter County officials concerned about its impact.

The massive state budget bill, which appropriates money for capital expenditures, the operation of state agencies and other spending measures, includes a provision requiring a 50 percent tax cut on the property taxes applied to real and person property of for-profit hospitals. That would include taxes on the building and equipment inside.

Porter Regional Hospital would be among those hospitals to receive the tax break.

The exact impact of the legislation, if passed, is difficult to calculate, local officials said.

Porter County Auditor Vicki Urbanik said the loss of revenue the first year could be in the hundreds of thousands of dollars.

The state imposed tax reduction would come on top of a property tax abatement already granted by the Porter County Council. * * *

In Indianapolis on Tuesday, State Sen. Karen Tallian, D-Ogden Dunes, proposed deleting the property tax cut for for-profit hospitals.

"Unfortunately, I think this was done without any regard for the effect that it might have on local governments, and for any tax breaks that locals may have already given to them," Tallian said.

But State Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, urged a "no" vote on Tallian's request and said he would work with Tallian on the issue through the conference committee process over the next two weeks.

Kenley said the measure was inserted into legislation to allow for-profit hospitals to more easily compete with non-profit hospitals, which do not pay property taxes.

Niki Kelly reports in the Fort Wayne Journal Gazette:
Five area hospitals – including three in Allen County – could save millions in property taxes thanks to a small provision in the 200-page state budget bill.

The 14 lines inserted would generally give all for-profit hospitals in the state a 50 percent property tax exemption on taxes payable starting in 2017.

Statewide, the change might reduce hospital property tax bills by $4â ¯million, according to a fiscal impact statement on the budget. Some of the taxes will be shifted to other taxpayers, and some dollars will be lost to local units of government.

“It will have a huge impact,” said Allen County Auditor Tera Klutz. “I’m not surprised by the language. It’s tough because we have exempt hospitals and non-exempt. It’s something the legislature needs to look at.

“From a personal standpoint, I understand. Who doesn’t want to cut their tax bill in half? But there were no hearings or discussions on this.”

The language affects 11 hospitals in the state, according to the Association of Indiana Counties and the Indiana Hospital Association.

Locally, they include all the hospitals owned by Lutheran Health Network – Lutheran, St. Joseph, Dupont, Kosciusko Community and Bluffton Memorial.

Read the story for more details and rationale.

Posted by Marcia Oddi on April 15, 2015 09:40 AM
Posted to Indiana Government