Economic advocacy groups in Ohio have released a report saying the two major nonprofit health systems in Cleveland — Cleveland Clinic and University Hospitals — are adversely affecting the city's school system because they do not pay any property taxes.
Policy Matters Ohio, in conjunction with Common Good Ohio and the Cleveland Teachers Union, released the report. The groups said Cleveland Clinic and University Hospitals own more than $2 billion in tax-exempt property in Cuyahoga County, $1.6 billion of which is located directly in Cleveland. Nonprofit hospitals throughout the country do not pay property taxes due to their tax and charitable status
If the systems did, however, pay property taxes, they would pay anywhere from $34 million to $72 million every year, depending on how the county fiscal office adjusted figures. The groups said those funds would go directly toward the county, city and school district, among other government entities. The CTU said the city's school district alone would receive an extra $20.5 million to $34.2 million per year if Cleveland Clinic and University Hospitals paid property taxes.
The groups noted their figures also do not include the values of properties for which Cleveland Clinic and University Hospitals are seeking tax exemptions.
Both health systems responded to the report with statements to the Cleveland Plain Dealer. Cleveland Clinic said: "Cleveland Clinic fully complies with all laws required of charitable organizations in the state of Ohio, including payment of any applicable taxes. We have provided significant support to the Cleveland schools over the years and recognize the importance of their efforts to improve education in the city of Cleveland."
University Hospitals told the newspaper it provided $273 million in community benefits in 2012, and if the system were taxed on its property, "we wouldn't be able to provide that level of service."
During the past two years, nonprofit hospitals have had to defend their tax-exempt status from government officials and citizens alike. Most notably in the past year, Pittsburgh Mayor Luke Ravenstahl announced the city would pursue revoking the tax-exempt status of UPMC.
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Charity Care and Property Taxes: Why They Are Now Inseparable