Tax-exempt hospitals eyed amid state budget gaps

Tax exemptions for not-for-profit medical enterprises in the Winston-Salem, N.C., area are weighing heavily on lawmakers trying to make up revenue shortfalls, reported the Winston-Salem Journal.

The debate comes as policymakers in Illinois and elsewhere are leaning on providers to give up some of their exemptions. The issue has become especially acute for Winston-Salem, which has become a center of healthcare delivery, services and research in the Southeast. Residential property owners make up 69 percent of the property tax rolls, compared to 54 percent a decade ago, notes the Journal, and the county is facing a potential $20 million property tax gap by 2014.

In Illinois, Gov. Pat Quinn said the state would begin revoking tax exemptions to hospitals that operate more like businesses than charities. However, 17 pending revocations have yet to be acted on, reported the Associated Press.

"We've replaced tobacco and textiles with hospitals," Dudley Watts, Forsyth County manager, told the Journal. "Our growth industries now are the ones that don't have to pay property taxes and get a refund on sales taxes. Unless we look at it and change our tax structures, how are we supposed to keep doing what we're doing?"

City and county lawmakers are examining the tax exemptions of North Carolina Baptist Hospital and Forsyth Medical Center, which have a combined $2 billion in annual revenues but are both tax exempt, according to the newspaper. However, no serious steps toward revocations have occurred.

To learn more:
- read the Winston-Salem Journal article
- here's the AP article