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  #1  
Old 03-19-2005, 08:22 AM
Athena Athena is online now
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Do universities and hospitals typically pay taxes?

I live in a small town that is dominated by a hospital and a small university. Together, they take up more than 50% of the city. The city itself is hemmed in by other municipalities, so can't grow. From what I can gather, the tax base is pretty small, and the city commission is proposing a lot of not-very-popular ideas in order to increase city revenue.

Is it typical that hospitals and universities are not taxed? Are there any laws preventing the city from taxing them? I'm trying to determine if the lack of tax on these two institutions is some sort of good-ol-boy deal, or if there's some logic or law around not taxing them.
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  #2  
Old 03-19-2005, 10:09 AM
CrankyAsAnOldMan CrankyAsAnOldMan is offline
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Not-profit educational institutions are generally tax-exempt. It makes a big splash around here whenever the University acquires more land or an existing building because it takes it off the tax base. Conversely, when Pfizer bought some land from the U the city cheered. It's not a good-ol'-boy deal.

A hospital that is not-for-profit would probably be subject to the same principle. Not sure about a for-profit hospital, or which you have in your town.
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Old 03-19-2005, 11:59 AM
Mathochist Mathochist is offline
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Quote:
Originally Posted by Athena
I live in a small town that is dominated by a hospital and a small university. Together, they take up more than 50% of the city. The city itself is hemmed in by other municipalities, so can't grow. From what I can gather, the tax base is pretty small, and the city commission is proposing a lot of not-very-popular ideas in order to increase city revenue.

Is it typical that hospitals and universities are not taxed? Are there any laws preventing the city from taxing them? I'm trying to determine if the lack of tax on these two institutions is some sort of good-ol-boy deal, or if there's some logic or law around not taxing them.
With the amount of non-university property the Yale Corporation owns and the little amount it pays in New Haven taxes, it's well-understood that there is a deal floating around somewhere. I can't speak about other institutions, though.
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Old 03-19-2005, 12:56 PM
zamboniracer zamboniracer is offline
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Here in Ohio while the universities and not-for-profit hospitals do not pay any taxes on their real estate, those entities' employees pay both Ohio state and local city income taxes. As as result, because they both have lots of employees, city governments like having them around because they do - indirectly - contribute signifigantly to the tax base.
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Old 03-19-2005, 01:10 PM
Dewey Finn Dewey Finn is offline
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Some non-profits pay something called PILOT, where PILOT stands for Payments in Lieu Of Taxes. But this is voluntary, as non-profits aren't required to pay property taxes. It can help to smooth things when the university or hospital wants to expand or do something else that the city needs to approve.
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Old 03-19-2005, 02:12 PM
BrotherCadfael BrotherCadfael is offline
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Much of the property in our state's capitol city is owned by the state and is hence exempt from city taxes. The state makes a voluntary (it's in statute, but the Legislature could repeal it at any time) Payment in Lieu of Taxes (PILOT) which is nowhere near the full tax value but is better than nothing...
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Old 03-19-2005, 03:24 PM
OldGuy OldGuy is offline
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Quote:
Originally Posted by Mathochist
With the amount of non-university property the Yale Corporation owns and the little amount it pays in New Haven taxes, it's well-understood that there is a deal floating around somewhere. I can't speak about other institutions, though.
Yale is in fact the largest single tax payer in the city of New Haven. It pays taxes on its non-educational property. It also makes PILOT payments on its educational property to cover fire department costs. Since it has its own police force (as most large universities now do), one might argue it should not pay that portion of its taxes.

The state of CT also makes payments to the city to cover a large fraction of the taxes not paid. I understand this is still the taxpayers' money, but it means that the city would not get a lot more were it to suddenly be able to start collecting taxes.

When the city of New Haven recalssified the Yale golf course as non-educational property, the predicted increase in tax reveneus were not met because the state of course cut that portion out of their payments. And then all the residents living near the golf course complained when Yale offered the course as a site for a PGA event since it was now a "commercial" property.

When the minor league baseball team (New Haven Ravens) was operating a few years back and using the Yale baseball field, the city (I think West Haven in this case actually) demanded that taxes start being paid. The Ravens paid these through their lease and were the only AA baseball team to use a college stadium *and* the only one to pay taxes on their stadium since all other cities were exempting their teams. The Ravens moved out of town.
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Old 03-19-2005, 07:55 PM
St. Urho St. Urho is offline
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The hospital you're referring to is not-for profit. I thought the state made payments in lieu of taxes for the university and for the prison, for that matter, but I'm not 100% sure.

On another note, the city tried to pass an income tax back in the eighties that didn't work. That one only applied to non-residents, however.
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  #9  
Old 03-19-2005, 08:05 PM
Mathochist Mathochist is offline
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Quote:
Originally Posted by OldGuy
Yale is in fact the largest single tax payer in the city of New Haven. It pays taxes on its non-educational property. It also makes PILOT payments on its educational property to cover fire department costs. Since it has its own police force (as most large universities now do), one might argue it should not pay that portion of its taxes.

The state of CT also makes payments to the city to cover a large fraction of the taxes not paid. I understand this is still the taxpayers' money, but it means that the city would not get a lot more were it to suddenly be able to start collecting taxes.

When the city of New Haven recalssified the Yale golf course as non-educational property, the predicted increase in tax reveneus were not met because the state of course cut that portion out of their payments. And then all the residents living near the golf course complained when Yale offered the course as a site for a PGA event since it was now a "commercial" property.

When the minor league baseball team (New Haven Ravens) was operating a few years back and using the Yale baseball field, the city (I think West Haven in this case actually) demanded that taxes start being paid. The Ravens paid these through their lease and were the only AA baseball team to use a college stadium *and* the only one to pay taxes on their stadium since all other cities were exempting their teams. The Ravens moved out of town.
I stand corrected. I'm away from the city at the moment, so I don't have my local sources at hand. Then again, I'll admit that I tend to be rather predisposed against my employer.

Wait, I forget. I'm not an employee...
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