Nonprofit hospital chains are buying up billions of dollars’ worth of real estate around the country, milking them for income while using their charity status to avoid paying property taxes that fund schools, emergency departments, and other community services. Using their taxpayer-subsidized fortunes, some hospitals are trying to influence local elections in which their profits could be at stake — including a new effort to unseat a progressive mayor who’s cracking down on a hospital giant’s tax-exempt real estate empire.
Nonprofit hospitals are exempt from paying most federal, state, and local taxes in exchange for providing free or discounted medical care, along with other charitable acts like substance abuse treatment programs. But many of these medical centers are using only a fraction of their tax breaks on charitable care and are instead spending millions or billions on assets like real estate.
Once these properties are incorporated into the nonprofit organization, they are no longer subject to property taxes. It’s a practice that many argue is an abuse of hospitals’ tax-exempt status, stripping tax revenue that local governments use to pay for a wide range of services.
A soon-to-be-released study of hundreds of hospitals nationwide by the Lown Institute, a nonpartisan think tank, found that the top 10 percent of hospitals hold an average of $18 million in tax-exempt properties, according to data shared with the Lever. In Massachusetts, for example, the total value of property tax exemptions across the fifty hospitals included in the study is estimated to be $340 million.
“How does the goal of the nonprofit laws square with a hospital consolidating land in this way and just generally power in this way?” said Pat…
Auteur: Helen Santoro
