Manitowoc health-system building ruled taxable
A judge in Manitowoc has ruled that the city can assess property taxes on a facility owned by Holy Family Memorial, the area’s largest hospital and health system.
At issue was the taxable status of a building separate from the site of the Holy Family Hospital. That separate building houses offices and clinical departments, as well as administrative functions not only for the hospital but the entire Holy Family Network, which includes outpatient clinics.
On March 25, 2010, Circuit Court Judge Darryl W. Deets granted the city’s motion for summary judgment, ruling that the property is not exempt.
Attorney Amie Trupke, of Stafford Rosenbaum LLP, handled the case for the City of Manitowoc. She referred to the Holy Family case in her presentation at IWF’s property tax reform conference in February.
New federal standards imposed on nonprofit hospitals
In all the hoopla about the new health-care law, almost no notice was given to the new requirements for tax-exempt hospital accountability.
But here they are, thanks to Sen. Chuck Grassley (R-Iowa), a long-time critic of nonprofit hospitals. Although he joined all other Republicans in voting against the entire bill, since it became law, he has publicized the increased accountability reforms he wrote for hospitals.
Among other things, the new law requires the IRS to review the tax-exempt status of each hospital every three years. It will take time to fully analyze these provisions and their implications for Wisconsin, but you can find Senator Grassley's overview here.
Illinois nonprofit hospital loses tax exemption
In a closely watched case, the Illinois Supreme Court found that the state’s Department of Revenue correctly cancelled Provena Covenant Medical Center's property tax exemption in 2003 because the Urbana hospital failed to justify adequately the exemption through charitable giving.
For years, state lawmakers have debated whether to require hospitals to provide a set level of charity care to qualify for tax exemptions but have never been able to put a standard in place.
The Illinois decision creates momentum for efforts in Wisconsin and other states to tighten the loopholes allowing so much of the nonprofit health sector to avoid property taxes.
For details, see this story in the Chicago Tribune and this story on Stateline.org.
Revenue Department Revises Proposal
for Property Assessment Reform
Wisconsin’s Department of Revenue has released an overview of its new proposal for reforming the property assessment procedures.
An earlier version, released last year, was criticized especially for its idea of consolidating almost all assessment under county jurisdiction. The newest proposal would consolidate assessment districts into larger units, but would let municipalities retain control of their assessment functions.
The proposal calls for mandatory full-market valuation; electronic filing and access for all assessments and a new state Board of Tax Exemptions to provide guidance—but not binding advice—to local assessors.
IWF Conference Examines Property Tax Exemptions
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| Closing panelist Brad Karger, Marathon Co. Administrator, Mark Harris, Winnebago Co. Executive, and Jessica King, Oshkosh City Council Member discuss where do we go from here. |
Who isn’t paying their share of property taxes?
That was the focus of attention for about eighty local officials and other leaders—from over 30 Wisconsin communities—at an all-day conference in Madison, February 19, sponsored by IWF.
The conference was titled Rethinking Ways to Fund Local Government: Exploring Property Tax Exemptions.
Particular attention was paid to large nonprofit health-care systems; real estate speculators who abuse agricultural assessment; billboard owners; and nonprofit housing for affluent seniors.
Documents from the conference:
Conference agenda
Norman PowerPoint on Health Care facilities
Schlafer PowerPoint on Health Care facilities
Weeth PowerPoint on billboards
Weissenfluh PowerPoint on billboards
Reavey PowerPoint on nonprofit housing
Summary of nonprofit housing session
Dept of Revenue breakout session
Proposed restrictions on billboard taxes bad for communities
During a time of severe budget crises for local governments, the worst thing the Legislature could do is create even more exemptions from the local property tax, thereby depriving counties, municipalities and schools of vitally needed revenue.
Yet that’s exactly what would happen if legislation is passed to change the way advertising billboards are assessed for property tax purposes.
Assembly Bill 215, now before the Assembly’s Committee on Jobs, the Economy and Small Business would handcuff local government assessors who have been trying to properly assess the taxable value of billboards. AB215 is tailor-made for the billboard industry rather than for the local governments which depend on property tax revenue to fund essential services.
For details, see this IWF press release.
For background, see this article in the Business Journal of Milwaukee.
Federal TARP aid is a success story for Wisconsin’s small banks
Wisconsin’s small, community banks—with a little help from the federal government—have played a valuable role in helping stabilize the state economy during this deep recession, according to a new report from the Institute for Wisconsin’s Future.
While some of Wisconsin’s largest banks continue to struggle for survival, its nearly three hundred community banks have increased lending while maintaining fiscal health, according to IWF’s analysis of bank data.
It has been two years since the recession began and one year since the federal bank assistance program—TARP (Troubled Asset Relief Program)—was enacted. Twenty Wisconsin banks received TARP assistance. While the three huge TARP recipients are still struggling (M & I Marshall & Ilsley, Associated, AnchorBank), the 17 small banks that received TARP funds have as a group been Wisconsin’s strongest in terms of increased lending, stable capital, and maintenance of employment. These seventeen banks used the federal TARP funds to increase their lending, boosting small business activity around the state.
Financial giants caused the threat of global financial collapse and the worldwide recession. But small banks don’t deserve to be blamed for the economic disaster. Wisconsin’s smaller banks have helped the state weather the resulting storm.
The resilience of Wisconsin’s small banks and their ability to use TARP funds effectively demonstrate that proactive intervention by government is a critical tool for restoring Wisconsin’s prosperity. Government efforts to direct the flow of money during this economic crisis have been a vital safety net for Wisconsin’s middle class and small businesses.
Hear Jack Norman talk about this issue on WUWM's Lake EffectRead the full IWF TARP report
See the press release
IWF seeks moratorium on all tax breaks in the legislative pipeline
The Legislature should immediately stop work
on the thirty or more new or expanded tax breaks
already introduced this session.
There are two reasons for halting action on these
proposed tax credits, deductions and exemptions:
1. Given the budget crisis, it makes no sense
to cut state revenue. Some of the proposed tax
breaks may be sensible proposals, but with the
huge cuts proposed in state services, this is
not the time to enact new breaks.
2. The nonstop proliferation of tax breaks over the past twenty years has not only riddled the state tax base with holes, but has led to an enormous increase in the complexity of Wisconsin’s tax code and tax forms.
For details, see:
• IWF working paper: Simplifying Wisconsin Taxes