St. John’s Medical Center administrators are bracing for a fight over a proposed bill that would increase its property tax burden.
A bill that has passed out of the Joint Interim Revenue Committee would limit the types of property government entities would be able to own and operate without paying taxes on them. Essentially it would limit tax-exempt property for such organizations, like St. John’s, to what is used for their base operations, which is not now the case.
“Anything that we own, we buy them and title them under the Hospital District,” CEO Dr. Paul Beaupre said. “Therefore we are tax exempt on those properties.”
That includes the property the hospital uses for employee child care and housing. The new bill would increase the property tax burden for those properties, which Beaupre said might have to be passed on to the employees that use those services.
Beaupre sees the bill as the state looking for new sources of revenue. As royalty income has fallen during a decline in oil, coal and gas prices, the state has been forced to look for revenue elsewhere.
“Taxing property of tax-exempt entities isn’t going to replace coal revenues,” he said. “They’re grasping for anything.”
The bill’s language seeks a change to the phrase “governmental purpose,” which now covers most uses by such entities. It seeks to eliminate from the definition property that is used for recreation or leased by nongovernment entities.
The proposed bill is still in draft form and hasn’t yet been sponsored for introduction during the February Legislature. And while it would limit tax exemptions, it wouldn’t eliminate them. According to the draft language, any property that is used primarily for government purposes by the federal government, state government, town and county governments or school districts would be exempt.
Teton County School District No. 1 would remain tax exempt under the bill.
But Information Coordinator Charlotte Reynolds said the district operates three units of employee housing and is exploring building more.
If the bill were to include the school district, she said, it would likely increase the financial burden on employees.
“That would likely make it more expensive for employees to be able to live in the property,” she said, “if something like that were to be passed and inclusive of the school district.”
Beaupre said the local legislators he has spoken to, from town and county officials to the state delegation, oppose the bill, but it may have support statewide because other communities don’t have the same housing struggles as Teton County, nor are their property taxes rates as high.
“Our property values are so much higher,” he said. “To us it’s a big deal.”