Just because an institution can do something, that doesn’t mean it should. This idea should guide officials at MaineHealth in their tax appeal to the city of Portland.

MaineHealth is the corporate parent of Maine Medical Center. By law it is a registered charitable nonprofit corporation, making the hospital and some of its other properties tax exempt. In 2009, it bought an office building on Free Street for more than $3 million and invested more in renovations. Now it wants to move at least part of the value off the city tax rolls.

They may be entitled to the tax relief. State law lays out the conditions under which churches, schools, hospitals and other nonprofits are exempt from paying local property taxes. But that doesn’t make it fair.

Portland is struggling to pay for services, and residents and other businesses are facing a tax increase to fund next year’s budget. Proposed cuts to social services on the state level and the expiration of federal stimulus funds for education will put more pressure on city taxpayers.

Giving MaineHealth a break on its office building will mean that all other taxpayers will have to pay more. MaineHealth argues that it also provides community services, such as free health care for people who can’t pay, which is true.

But at least one city official complained that the charity work does not justify a tax exemption on an office building. At a time when MaineHealth was paying its CEO a seven-figure compensation package, said City Councilor John Anton, the city was freezing the pay of ambulance drivers.

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“They may be fully entitled to do this by law, but that tells me the law seems broken,” Anton said.

The Legislature has been unwilling to even study changing the tax law, in part because hospitals are such influential institutions in Augusta.

But absent any changes from the state, MaineHealth has a model in the history of its own headquarters on how it could proceed.

The building was previously owned by Blue Cross and Blue Shield, a nonprofit health insurance company that also was tax exempt. But it made payments to the city in lieu of taxes ranging from $50,000 to $80,000 a year.

MaineHealth could assert its tax- exempt status and still be a good neighbor by following that example.

 


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