Two Florida providers enjoy huge tax exemptions--even on non-clinical properties

City of Orlando prompted to raise taxes on other entities
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Two acute care providers based in Orlando, Florida, enjoy tens of millions of dollars in tax exemptions due to their non-profit status even though they have purchased many properties that do not provide clinical services, the Orlando Sentinel has reported.

Florida Hospital's 12 acute care facilities generate nearly $4 billion in annual revenue and enjoy a net margin of more than 8 percent, according to the article. Orlando Health's six campuses generate about $2 billion a year and have a net margin of around 12 percent. Combined, the two hospitals own property that would be assessed at around $2 billion in value and would be liable for about $50 million property taxes annually. The parcels include apartment houses, a theater and a tavern.

However, the two systems paid about $5 million in total taxes, according to the Sentinel. In one instance, Orlando Health agreed to pay a portion of taxes on 11 parcels it owns to finance a business improvement district. But the $175,000 a year it pays on those parcels is less than one-tenth what the tax would be if they were fully assessed, the newspaper reports.

Meanwhile, the city of Orlando hiked taxes by 17 percent in 2014 to property owners to pay for municipal services.

The fissures opening up between non-profit healthcare providers and the communities they serve have become wider as many once standalone community hospitals have become part of multi-billion dollar hospital systems. In Morristown, New Jersey, a hospital operated by Atlantic Health recently lost its tax exemption. That led to lawmakers proposing a bill that would have required other hospitals to pay fees to help support municipal services.

An Illinois appeals court also recently ruled that the state's rambling law that exempts non-profit hospitals from ever paying taxes was unconstitutional.

To learn more:
- read the Orlando Sentinel article

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