City may tax nonprofit hospital for first time

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by ERIC WILKINSON / KING 5 News

KING5.com

Posted on June 10, 2014 at 5:52 PM

As a non-profit due to its affiliation with the Catholic church, Bellingham's PeaceHealth Saint Joseph Medical Center has enjoyed a generous tax break for more than 120 years.

Budgets, however, are tightening and the hospital had a healthy excess of $41-million last year. Now, some want to tax the facility on the 30 percent of the income it receives from private insurers – leaving the remaining 70 percent from Medicare and Medicaid untouched. That works out to about $1.2 million for the city next year.

"For me, it’s a matter of tax fairness," said City Councilman Michael Lilliquist.

A majority of people on the council favor the new tax, but the hospital has not been able to plan for it. That means administrators may have to make some difficult decisions about the budget.

St. Joseph's officials wouldn't talk about whether they would make any specific cuts, instread saying the city is cutting the safety net of its citizens.

"We will do everything we can to ensure we provide access to services, including mental health. At the same time, there are constraints and we’ll have to deal with them as we go," said hospital Community Affairs Director Chris Phillips.

Councilman Lilliquist bristles at the notion that the city is balancing its budget on the backs of the sick.

"Frankly we need tens of millions of dollars. One or two million, that’s not motivating for us. I don't believe they'll cut services," he says. "I think they're better than that."

A final vote on the new tax is expected June 23.
 

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