Non-profit hospitals, which have been fighting to keep themselves from paying taxes in Utah since the 1986 election, may have a new ally in the Salt Lake County Commission.
But the hospital issue, which likely won't be considered until spring, may divide the commission's two Democrats.Randy Horiuchi, who was sworn in this week along with fellow Democrat Jim Bradley, recently resigned from the board of directors of Wasatch Canyons Hospital, which is exempt from taxes. The psychiatric hospital is owned by Intermountain Health Care.
Horiuchi said Tuesday he believes non-profit hospitals should be allowed to run like a business, and that means they can accumulate profits. Such surpluses have been a stumbling block among county attorneys and commissioners who have claimed in recent years that truly charitable hospitals shouldn't stockpile money as long as poor people are in need of help.
"Randy and I may disagree on this one," Bradley said, noting he has yet to study the issue. "I tend to feel if you make money, you ought to pay."
In 1986, Utah voters astonished experts by defeating a proposition that would automatically have exempted all non-profit hospitals from paying taxes. Since then, the hospitals have had to prove to county commissioners each year that they are worthy of the exemption. Some have qualified, while county commissioners have rejected others.
Now, Utah is being heralded nationwide as the pioneer in scrutinizing hospitals.
But Horiuchi said many of the critics forget that non-profit hospitals free the county from its responsibility to run a county hospital.
"That's saved us millions," he said. "We often forget that hospitals are tremendously expensive to run."
Horiuchi said he will make sure hospitals demonstrate their charitability before he exempts them from taxes. "But most of the hospitals I've seen do work toward charitability."
He said hospitals, like governments, have to run on sound business principles to be effective.
"What disturbs me is people who think only hospitals that give nothing but charitable care - like Shriners, for instance - should be exempt," Horiuchi said. "That's not reality. But they must plow a lot of their excess into charity."
In recent years, several counties have denied tax-exempt status to non-profit hospitals. The hospitals appealed those denials to the State Tax Commission. After years of study, the Tax Commission recently released new tax-exempt standards by which the hospitals will be judged.
Hospitals' appeals to the Tax Commission will now go back to the county boards of equalization for new hearings.