Another nonprofit hospital caught in property tax crackdown

BVWireIssue #181-1
October 4, 2017

A nonprofit hospital in Pequannock, N.J., has settled a property tax dispute triggered by a challenge to its charity status, according to a report on The hospital, the Chilton Medical Center, is operated by Atlantic Health Systems, the same entity that owns the Morristown Medical Center, which lost its property tax exemption back in 2015.

The Morristown hospital lost its property tax exemption because its activities were so intermingled with for-profit doings and questionable deals with physicians that it no longer resembled a charitable institution. Overly lavish executive compensation and perks were also a factor. Cash-strapped municipalities have jumped on this bandwagon, and, at one point, almost half of the state's nonprofit hospitals were caught up in tax court cases over property tax exemptions.

Under the settlement, Atlantic Health will pay Pequannock $262,500 annually through 2021 for community service and public health initiatives. This settlement may pave the way for similar deals with nonprofit hospitals being challenged in other municipalities.

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