Nonprofits speak out against expanded Business Enterprise Tax
Representatives from hospitals, private colleges and other nonprofits packed a House committee room yesterday to oppose a bill that would eliminate their exemptions from the Business Enterprise Tax.
“I think it’s a terrible idea,” said Rep. Peter Ramsey, a Manchester Democrat who is president and CEO of the Palace Theatre, a nonprofit organization in Manchester. “It’s a very negative debate to have because, as we all know, nonprofits in New Hampshire make our state a better place to live.”
A bill sponsored by Rep. David Hess, a Hooksett Republican, would expand the Business Enterprise Tax to include nonprofits that receive more than $2 million in revenue for their programs and services. He said the bill is “revenue neutral”– he proposes using the expanded tax base to lower the overall Business Enterprise Tax rate, currently 75 cents per $1,000 of enterprise value, to a rate of 68 cents per $1,000. Religious organizations and private foundations would maintain their tax exemptions.
Hess, speaking before the House Ways and Means Committee yesterday, said hospitals and private universities are among the state’s greatest accumulators of wealth.
Steve Ahern, president of the New Hampshire Hospital Association, said the 24 nonprofit community hospitals in the state offer millions of dollars in charity care and shortfalls of Medicare and Medicaid, and are already taxed under the Medicaid Enhancement Tax.
Ahern said hospitals paid $184.9 million through the Medicaid Enhancement Tax in 2011, in addition to losing more than $202 million while treating Medicaid patients.
Adding the BET to the hospitals’ expenses is simply not sustainable, Ahern said.
“Hospitals were created by our communities, they are governed by our communities and they exist to serve them,” he said.
When asked whether he considered linking the expanded Business Enterprise Tax to the Medicaid Enhancement Tax, Hess said both issues were too complicated on their own to consider together. But, he noted, he is open to suggestions about his bill.
Gina Balkus, CEO of the Granite State Home Health Association, said the bill would affect about 20 nonprofit visiting nurse associations. Those groups receive most of their program service revenue from government sources, which Balkus said have decreased under federal budget cuts and the Affordable Care Act.
“I am extremely concerned about the financial viability of New Hampshire’s nonprofit home health agencies, just as our state is going to be hit by the silver tsunami of our aging population,” she said. “Imposing the Business Enterprise Tax on nonprofit home health agencies that are already potentially at risk is like rubbing salt in a wound.”
Representatives from nonprofits that do not offer health care also spoke against the bill yesterday.
Richard Minard, vice president for policy at the New Hampshire Community Loan Fund, said the bill would affect his organization and its ability to offer loans to low-income individuals.
“We want to be a major accumulator of wealth in New Hampshire, but we want the accumulation to go to the low-wealth individuals who populate the state,” Minard said.
An expanded Business Enterprise Tax would also have “serious implications” for private colleges and universities, said Michele Perkins, president of New England College and chairwoman of the New Hampshire College and University Council.
“The proposal contained in HB 1509, which would require private educational institutions to pay the Business Enterprise Tax, would negatively impact the ability of our institutions to fulfill their educational purposes, to respond to workforce needs of New Hampshire’s businesses and to provide needed scholarship assistance to New Hampshire students,” Perkins said.