Newspaper article The Record (Bergen County, NJ)

Nursing Homes Next in Line to Be Taxed?

Newspaper article The Record (Bergen County, NJ)

Nursing Homes Next in Line to Be Taxed?

Article excerpt

Now that a dozen towns around New Jersey have sued their non- profit hospitals for property-tax payments, some nursing homes are in the cross hairs of municipal officials eager for new revenue sources. North Bergen, for example, targeted both its local hospital and the hospital-owned nursing home next door -- the Harborage -- in a lawsuit filed last month in state Tax Court.

The nursing home industry, which often functions with tight financial margins, feels vulnerable now that a landmark case involving Morristown Medical Center's property-tax exemption has opened up the possibility that other non-profits could face potential property taxes, or demands by their municipalities for payments in lieu of taxes.

"Where do you draw the line?" asked Michele Kent, executive director of LeadingAge New Jersey, which represents non-profit nursing homes. "Where do the dominoes stop falling? ... You could take this out to the entire panoply of thousands of non-profits throughout the state. It seems to pull the rug out from the whole concept of non-profit work."

Most non-profit nursing homes don't compare in size or scale to hospitals, she said. The 56 members of her association tend to be small facilities that were founded by religious or philanthropic organizations to fulfill their missions, she said.

Instead of lawsuits, one plan would protect nursing homes from property taxes, but require some of them -- along with the state's non-profit hospitals -- to pay fees to their municipalities.

State Sen. Nicholas Sacco -- who as North Bergen's mayor voted in favor of the suit against the Harborage -- is expected to introduce legislation today that would require nursing homes owned by hospitals to pay community-service fees in lieu of property taxes.

Sacco's bill would protect the property-tax exemption those institutions enjoy, but subject them to annual payments to offset the cost of police and fire protection or lower property taxes for others.

"This nursing home component is bigger than the hospital component to me," Sacco said. His bill would levy a $2.50 daily fee for each bed at a hospital or hospital-owned nursing home. It does not include other non-profit nursing homes.

For the Harborage, with 247 beds, that would come to about $225,000 a year. HackensackUMC Palisades, as Palisades Medical Center is known after its recent acquisition by Hackensack University Health Network, has 202 beds and would pay $184,000 annually, under his measure.

There are 358 nursing homes in New Jersey, of which more than 250 are for-profits and 15 are government-owned, according to a report by the state hospital association.

Among the non-profit facilities are several owned by Meridian Health system, which is expected to merge with Hackensack University Health Network this year. St. Joseph's Health System owns a nursing home, St. Vincent's, in Cedar Grove. And several other non-profit hospitals also operate "transitional care units," which are considered nursing homes for licensure purposes, according to the report.

Sacco's spokesman said the senator's bill was drafted with the North Bergen situation in mind, but the senator was open to amending his measure to include other non-profit nursing homes not owned by hospitals. …

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