Evening star., 1942-02-01
Hospitals See
Taxation as
Bitter Blow
Awuit FinuI Word
On Reversal Of
Exemption Policy

Exemption Policy
This Is the first of three dytf-
cles discusstng the taxation OF
Washington hospitals. The sec.
ond i0iu appear tomorrotO.)
I.
Oficiak Of Washington's volun.
tary hospitals are awaiting anx-
iously final determination of an Is
sue which now stands tentatively
decided in favor of reversing policy
In effect more than go years. The
question is whether properties OF
the institutions used for the GUS
tomary functions Of a hospital shall
be subject to realty taxes.
Most board members of privately
operated hospitals frankly are at a
loss as to how their institutions
could plan to carry the added A.
nancial burden, II, ultimately, 1t Is
placed upon them. They point out
that increasing costs of operation
and the vanishing of hopes for aug
menting endowments already have
produced economic crises.
We'll either have to fold up or
let the Government take us over"
one official commented recently, and
his was not an isolated view.
The problem stems from a deci-
sion of the District Commissioners
to review the cases of properties
long classed as tax-exempt. For
more than a year, the matter has
been under study by the Real Estate
Tax Exemption Board, headed by
District Budget Oficer Walter L.
Fowler. From time to time, the
board has handed to the Commits
sioners reports on its investigation
Of various properties, including hos
pitals.
Protest to Commissioners.
At least portions of virtually all
voluntary hospital properties in
the city have been held subject to
assessment for taxes. Their ON
cials have protested to the Commits
sioners and have been told infor-
mally they will not receive demands
for actual payment of realty levies
pending final disposition of the
question.
In deciding the hospitals should
be placed on tax rolls, the Tax Ex-
emption Board has pointed to a
long standing section of District
tax law providing exemption for
buildings belonging to institutions
OF purely public charity, conducted
without charge to inmates, profit
or incomes -
Until the comparatively recent re-
view program, District officials had
agreed Congress meant thereby to
save from taxation such establish
ments as the voluntary hospitals, in
addition to various completely chari-
table institutions. Founders of sew
eral hospitals organized since pas
sage OF the law laid plans for the
new medical care centers with the
understanding they would be exempt
from taxes from the first.
Two Not Involved.
Columbia Hospital for Women Is
not involved in the current discus
sion. having been built on Govern
ment-owned land. Doctors Hospi-
tai also is clear, having been estab-
llshed under a profit" charter,
thereby clearly assuming liability for
taxes. However, o. K. Fike, director
OF the latter institution, explains
the lncorporatorS do not consider
1t money-making proposition and
are satisfied to break even"
Since the status of hospitals has
come under scrutiny at the District
Building, 1t has been held repeat
edly that they do not meet the test
OF purely public charity" inasmuch
as free care Is not given all patients.
The new policy has found authori-
ties pointing to the wording of the
law and holding that not even by
the most liberal of interpretations
could an exemption be read into it
for hospitals accepting paying
patients. The board has admitted
finding little basis for believing the
hospitals were being operated for
private profit" while declaring no
course was open but to recommend
restoration Of the properties to the
tax lists.
Exempt Some Parts.
Individual circumstances have
varied. but in general the board has
held taxable that portion of the
hospital property not used for a
completely charitable purpose or for
education, such as a nurses school.
For example, Providence Hospital.
proper, was adjudged subject to
realty taxes, whereas its nursing
school was classed as an educa-
tional institution and its day nurs-
cry found to be a purely public
charity. In regard to the latter, the
board reported two Of the four lots
of the nursery building grounds
should be taxed as excess land"
Similarly. the nursing school of
Garfield Memorial Hospital was
held to be an educational institu-
ton. The board retained the George
Washington Medical School and its
annex on the tax-free list. but re-
fused to accept the university's con-
tention that the adjacent hospital
was an integral part of the medical
school in daily use as an aid in the
teaching of medical students.
Following the boards decisions,
the hospitals appealed to the Com
missioners, and there the matter
rests today. Hospital officials con-
fess they are unable to comprehend
all possible results of a policy re-
versal which has left their institu-
tions no longer secure In the free
dom from real estate taxation they
had taken for granted decade after
decade.
|Serneonf Made |