Should 'Meds and Eds' Be Taxed?

In the midst of the state's ongoing economic struggles — and the continued drumbeat of bad fiscal news from places like Woonsocket and Providence — state Rep. John Carnevale (D-Providence, Johnston) has again proposed a bill in the General Assembly that would allow cities and town to tax hospitals and schools that are currently exempt from taxation, the Johnston Sun Rise reported this week.

The so-called "meds and eds" bill (H7450) would allow communities to collect up to 25 percent of the amount of taxes that would be assessed if the properties were owned by entities other than nonprofit organizations.

Carnevale's bill is also specific in noting that the cities and towns would collect the taxes to fund "essential services," which are defined as police, fire, and rescue — but "not limited to" these, according to the bill's language.

A press release issued by the General Assembly media office states that Carnevale's proposal "comes on the heels of Providence Mayor Angel Taveras’ recent initiative to seek more contributions from tax exempt institutions to steer Providence away from the brink of bankruptcy."

The Sun Rise also reported that the House Finance Committee held a hearing on Carnevale's bill on Mar. 28, during which Carnevale testified in favor of his bill and noted that the original agreement allowing Brown University to be tax exempt was signed in 1764.

While other supporters of the bill maintained that the bill would help raise needed revenue — Providence Mayor Angel Tavares estimated the city's potential take at more than $28 million — opponents argued that hospitals and schools already provide other kinds of support to their host communities.

Hospital representatives told the House committee that they typically provide millions of dollars in uncompensated care to patients without health insurance, the newspaper reported.

What do you think — is it time that tax-exempt schools and hospitals start paying taxes for so-called "essential services?" Or are their contributions to their host communties — including jobs, payroll taxes, and uncompensated medical care — a reasonable trade-off for not being taxed?

Let us know in the comments below.