New Jersey hospital’s tax-exempt status challenged by city council

Hackensack University Medical Center could be on the hook to pay back millions in property taxes if the Hackensack, New Jersey, city council gets its way.

According to northjersey.com, the decision was spurred by a 2016 ruling against another hospital, Morristown Medical Center, which paid a settlement $15.5 million after a judge ruled it ran more like for a for-profit business than a charitable institution. Since then, 41 tax challenges have been filed between hospitals and municipalities.

“It wasn’t a precedent-setting case,” said Kerry McKean-Kelly, spokesperson for the New Jersey Hospital Association. “It didn’t automatically become the law of land. But really what it did is created this Wild Wild West among municipalities of tax challenges.”

Hackensack’s tax assessor, Art Carlson, said the hospital does pay as much as $8 million on properties outside its main campus. The move by the council is about making sure the hospital knows “they’re on notice,” Carlson said.

“We appreciate what they’ve done for the city. But we feel we’re entitled to some commensurate payment. You're sitting on 17 acres of prime real estate. Just on the land alone, we need some type of agreement,” he said.

The goal is to figure out a settlement and avoid litigation, Carlson said.

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