A bill that would have levied new taxes, called "community contribution fees", on nonprofit hospitals in New Jersey died by pocket veto on Governor Chris Christie's desk on Tuesday, according to bill co-sponsor state Sen. Robert Singer.
The bill would have assessed fees at a rate of $2.50 per active bed per day and $750 per satellite facility, with a set 2 percent increase each year to cover the cost of inflation. Now, said Singer, they will be starting over, with the Christie administration committed to crafting a new solution to the looming spectre of tax assessments on hospitals. The key players in the discussion will include the state's Department of Community Affairs, Department of Taxation, the New Jersey Hospital Association, League of Municipalities, and the attorney general's office.
The bill was created to prevent what many saw as a coming tidal wave of crippling tax assessments on New Jersey's 60 non-profit hospitals following the Morristown Hospital decision last June, after a judge ruled the hospital was no longer operating as a true non-profit. Morristown will now pay more than $15 million in property taxes over the next decade.
[Also: New Jersey nonprofit hospitals face new tax if Governor Christie signs bill into law]
"I think we're all going into this with clean hands, having to deal with the Morristown decision. That being at the forefront of what we're doing, I'm very confident that we are going to come up with something that's very reasonable and very fast. This is not something that we're going to be talking about 6 months from now," said Senator Singer.
Christie is currently running for the Republican presidential nomination.
Singer said the state's Community Affairs Department, along with the Department of Taxation, do have the power to reach out to tax assessors to buy time so that hospitals don't get slapped with multimillion dollar tax assessments or lawsuits, which was a major concern in getting the bill passed in the first place. He said he expects the new bill could be similar, but will have met with the AG's approval in making sure it meets constitutional muster, something that was a concern this time around. The New Jersey Attorney General's office declined to comment on what some of the bill's vulnerabilities were.
"The bill was a good framework. If it has be tweaked or changed a little bit we'll work on that. I still believe the framework of the bill is important because it made the hospitals whole financially as well as contributed to municipalities," Senator Singer said.
One critic of the bill, Newark City Councilwoman Gayle Chaneyfield Jenkins, is also looking forward to the chance to start over with this legislation. She referred to the old bill as a "giveaway to the hospital lobby" and is convinced it would have shortchanged Newark and other municipalities because of its "one size fits all" design.
"The governor's pocket veto of this legislation that was hastily drafted and pushed through the lame duck Legislature gives us a real opportunity to craft a solution that does not shortchange Newark the way this bill did...In the coming months, we need to convene an independent task force with tax experts and health care providers, including acute care hospitals and specialized nursing homes, so we can determine the best approach to ensure the city is receiving its fair share," said Councilwoman Chaneyfield Jenkins.
Twitter: @BethJSanborn