City leaders are expecting the Providence, R.I.-based Lifespan to make a $400,000 payment in lieu of taxes in 2020, despite recently posting a $55 million operating loss, according to The Boston Globe.
Instead of paying property taxes because they are exempt, nonprofits sign payment in lieu of taxes agreements with the city of Providence. The Globe reported Providence officials are worried that if Lifespan doesn't make the $400,000 payment for the fiscal year started July 1, officials will be scrambling to fill a hole in the city budget.
"If I don’t pay my taxes, they’re going to put my house up for sale at a tax sale," Councilman James Taylor, a member of the council's finance committee who has been critical of Providence's nonprofit institutions for not offering more financial support to the city, told The Globe. "I think we should go back to the table and make sure those payments aren’t voluntary and make sure we know what their fair share is."
Jane Bruno, a spokesperson for Lifespan, told The Globe it will decide whether it will make the voluntary payment to the city next spring.
The Globe reported that a spring 2020 decision would give the city only a few months to secure new revenue or find savings before the end of the fiscal year.
Emily Crowell, a spokesperson for Mayor Jorge Elorza, told The Globe that the city still expects Lifespan to send the city $400,000 before the end of the fiscal year despite its losses.
Lifespan attributed its losses in fiscal year 2019 to "a dramatic and unexpected reduction in Medicare rates" and "excessive demands" placed on it after Care New England closed the money-losing Memorial Hospital in Pawtucket, R.I.
More articles on healthcare finance:
Pennsylvania medical center closes
North Carolina hospital misses payroll
CMS to repay hospitals millions for off-campus clinic visits