ELIZABETH – In June, Governor Chris Christie pocket vetoed legislation that would have had non-profits make certain payments to their host municipalities in order to compensate for tax exemptions. Today, the governor stood behind a podium at Trinitas Regional Medical Center in Elizabeth to share a new plan to address the issue: the creation of a two-year commission that will study tax exemptions and a temporary freeze of property tax rates for non-profit hospitals.
“Currently there are 62 non-profit hospitals throughout New Jersey,” Christie said. “The solutions to the tax problem have been… patchwork at best. The issue deserves, in my mind, a lot more thoughtful deliberation.”
The solution will freeze currently pending legislation. The commission will consist of nine members including one nominated by the assembly speaker, another by the senate president and one leader of a non-profit hospital.
According to Christie, such deliberation is critical because it the current statutes that tax exemptions are drawn from are “over 70 years old.” The Governor said that it is time to act in a legislative capacity to update such statutes.
“It is a complex issue and it is a very old statute that is at the heart of it,” Christie said. “These criteria that are on the books are really antiquated and need to be reviewed in a thoughtful way.”
While Christie thanked Senate President Steve Sweeney for his support—and said he hoped that Assembly Speaker Vincent Prieto would also get on board with the plan—the senate president issued a statement after the announcement of the commission criticizing the governor for his veto of the earlier legislation.
The statement said: “The governor’s proposal to create a two-year study commission along with a moratorium on municipal lawsuits really just freezes current conditions in place. A real solution will be delayed and municipalities will have to wait.”
“But the problem should not be ignored because it will continue to leave municipalities and their taxpayers paying the price for inaction and the hospitals in a continued state of uncertainty.”
“If the governor and Speaker Prieto agree to support this plan I will do the same in the Senate with the hope that it will lead to productive and workable solutions.”
Speaker Prieto issued the following statement:
“A moratorium is not a solution to this problem. Neither is a commission.
“The Legislature sent the governor a bill last session that was a comprehensive and common sense plan to resolve this issue. It was supported by Democrats and Republicans alike and backed, at that time, by the New Jersey Hospital Association, Hospital Alliance of New Jersey and the New Jersey Business and Industry Association, among others. The governor should have signed that bill.
“We need to resolve this issue now, not in two years.”
During the announcement, Christie stressed that careful consideration was necessary because healthcare is a major economic force in New Jersey.
“Healthcare has always been one of the economic engines of this state,” Christie said. “If we don’t act we might not only hurt the people who need healthcare but the state’s economy as well.”
While the assembly speaker was critical of the governor’s decision to impose a freeze, Senator Robert Singer issued a statement praising the decision. Singer was the sponsor of the last legislative effort (S-3299) to address the issue.
Singer’s statement said: “The bipartisan agreement announced today will end the need for costly litigation between non-profit hospitals and the communities they serve. This agreement will afford us the time we need to conduct a proper review of the tax exemption law to find a solution that is fair to host municipalities without crippling the hospitals that serve them.”
The commission would last until January 2018, the very end of Governor Christie’s term.