Joint Committee on Revenue
The Massachusetts Health & Hospital Association (MHA), on behalf of its member hospitals, health systems, physician organizations, and allied health care providers appreciates the opportunity to offer testimony in opposition to
HB1565. This legislation would permit communities to impose one-size-fits-all payment in lieu of taxes (PILOT) programs on charitable organizations.
In addition to around-the-clock emergency services, non-profit hospitals provide a significant amount of charity care, community benefits, and care coordination for local residents from the acute care to post-acute care settings. In times of a disaster, hospitals are always at the ready to provide emergent, urgent, and behavioral health services for all residents. Many of these services are provided without compensation and are a small portion of the benefits that non-profit hospitals, as public charities, provide to the cities and towns where they are located.
Municipal discussions with local charities related to property taxes or payments in lieu of taxes must be done on a case-by-case basis that takes into account each unique and specific service/benefit that a non-profit entity brings to the community. Currently, community leaders conduct these discussions with local non-profit hospitals and health centers and regularly develop reasonable agreements in addition to distinct community benefit programs. Such discussions should continue without the interference of a one-size-fits-all template for the taxation of charitable organizations.
Non-profit hospitals, like all charitable organizations, are each unique. The various ways that local communities establish payments in lieu of taxes (PILOT) programs and other community benefit arrangements should also remain unique. Instead,
HB1565 allows municipalities to choose a hard starting point as a punitive threat – and a decidedly arbitrary one at that. In essence, this legislation empowers municipalities to decide which organizations should be taxed and which shouldn’t, regardless of state and federal tax laws, oversight and permissible charitable structure.
In Fiscal Year 2016, hospitals in the commonwealth provided more than $644 million in community benefits programs for local residents and their communities. These benefits included free cancer screenings, mammograms, in-school health programs, support for local health and social services, and more. In addition, hospitals also provided over $298 million in net charity care for local patients
who could not afford the cost of medical care. As a result of this unique care and attention that hospitals provide to our communities, MHA believes that the various ways that local communities and charitable organizations currently establish PILOT programs and other community benefit arrangements should remain intact and not be forced to change by further strengthening the heavy hand of government.
Any bill that creates a one-size-fits-all approach to payments in lieu of taxes is a move in the wrong direction that would restrict the ability of many charitable institutions to appropriately meet the needs of their communities and limit important conversations between municipalities and their local charities. Such an inflexible standard is both improper and unnecessary. For this reason, MHA urges the committee to oppose
HB1565.
Thank you for the opportunity to offer comments on this important matter. If you have any questions or require further information, please contact MHA's Vice President of Government Advocacy, Michael Sroczynski, at (781) 262-6055 or
msroczynski@mhalink.org.