Hospital receives property tax exemption for 2019, but not 2018

By Nathaniel Smith

The Times-Independent

Moab Regional Hospital will receive a property tax exemption in 2019 for two condominiums and a house that it owns, but it will not have the taxes from 2018 forgiven. During its Feb. 19 meeting, the Grand County Council approved the 2019 tax exemption 4-2, but then rejected the 2018 cancellation with a 3-3 vote.

Jen Sadoff, chief executive officer of MRH, appeared before the council to answer questions about the tax exemption request. She explained the residences are used as transitional housing for new employees or temporary housing for traveling employees during the peak season. She emphasized the housing is not for traveling physicians who charge for their services and is instead used for lower-level healthcare workers, such as lab technicians. Sadoff described the housing as a necessary “operational expense” and that the hospital used to provide hotel rooms at a much higher cost.

Because MRH is a nonprofit hospital, it has a tax exemption status. Sadoff brought up three key points to support the tax exemption request. First, Sadoff said, healthcare is a foundational part of the community and traveling employees are vital to the hospital’s operations. Without the housing, relying on hotels would cost taxpayers even more, Sadoff said. Second, she noted that there is no financial benefit provided to the occupants since the housing is priced close to the market-rate. Furthermore, the housing is empty part of the year, so it can’t pay for itself, she said. Sadoff’s third point was that all the occupants are employees or independent contractors of the hospital and not traveling physicians.

To demonstrate its charitable contributions to the community, Sadoff noted that MRH provided $5.1 million in uncompensated care in 2018.

Council Member Curtis Wells questioned the necessity of the exemption, saying, “If the county didn’t approve the exemption, basically you’re acknowledging you could still afford to pay for the taxes on the homes, you’re just looking to improve your finances.” Sadoff agreed that the approximately $4,500 in taxes wouldn’t break the hospital’s budget, but “it could set an unfortunate precedent to deny an important nonprofit who does have eligibility for property [tax] exemption.”

Wells was also worried about setting a precedent, but for a much different reason. He said granting a tax exemption made him “a little bit uncomfortable” because of the message it would send to other nonprofits. “Now everyone that can associate themselves with providing a service to the community is entitled to a tax break on property taxes,” he said.

Council Member Mary McGann noted, “It’s very common in communities throughout the nation not only to do stuff like this, but many are even doing more.” She said, “Cities are needing to do things to support the medical services in their community, and I see this as supporting our medical services.” Sadoff agreed, adding that the hospital has lost potential candidates because of a lack of transitional housing.

McGann moved to approve the 2019 tax exemption and Council Member Terry Morse seconded. The motion passed four votes to two with Wells and Greg Halliday voting in opposition. Jaylyn Hawks was not present at the meeting.

After the vote, Grand County Treasurer Chris Kauffman suggested the council cancel the hospital’s 2018 property taxes on the residences. He explained the application for tax exemption was filed on time in 2018 but was held up in legal review.

The council did not discuss the cancellation and moved directly to a vote. Again, McGann made the motion and Morse seconded. However, the second motion failed because it split the vote evenly. Council Member Rory Paxman voted in affirmation of the first motion but opposed the second.