More on the Steward tax cuts
Since Steward Health Care System made some major amendments to its purchase agreement for Landmark, and Felice Freyer reported on Woonsocket’s plans to give the for-profit hospital some tax breaks, there have been a fair amount of jokes about the quality of this “deal.” Here’s a video a listener sent me-
So I decided to follow up with the city of Woonsocket to learn the exact nature of these tax cuts. Are officials really willing to do whatever it takes to sell Landmark? Matt Wojcik, the head of economic development says no.
We’re not just sitting here with our arms open, saying whatever you want.
Wojcik says the story of tax cuts for Steward is a long and complicated one. Way back in 2010, when Steward was known as Caritas and the then catholic hospital chain was thinking about buying Landmark, Woonsocket worked out a tax deal with the company. Wojcik says the General Assembly even approved a way for the company to pay less in state taxes. But then the sale never happened.
Since then, Caritas was bought by Cerberus and is now Steward. Wojcik says he’s not going to bother with any negotiations until he knows for sure that Steward is the owner of Landmark, but in the meantime, he’s been thinking about how the city and Steward can work together. But he says any tax cuts would involve a series of conditions including-
- Cooperation with local social service agencies to help offer job training.
- Some incentives to hire folks from those job training programs.
- A health care needs assessment so what Steward offers lines up with the medical needs in the community.
- A commitment to make the hospital more than an “outpost.” Wojcik says the hospital should serve as a hub for some type of service so people have a reason to come into the city.
Wojcik says the tax cuts themselves would also be strategic. Companies are taxed on both “real property”- land and buildings, as well as “tangible assets”- medical equipment, exercise machines, etc. He says the city would gain $1.5 million dollars on taxing the hospital’s “real property” and he intends to offer only a small tax break or none at all for that category.
Where he’s flexible is in the second realm of taxation, the “tangible assets.” He says he doesn’t want to discourage Steward from making significant investments in the hospital by running up a huge tax bill. If the for-profit wants to buy new machines and other fancy equipment, it should spend whatever it can on those investments and less on taxes.
So, he’s hoping to offer a three to five year tax break on those “tangibles.” After that, Steward can pay for any general upgrades or improvements on those initial purchases.
To Wojcik, this deal isn’t “being too soft.” He says it’s a way to make a fair chunk of money and encourage major improvements at the hospital. Wojcik sees it this way- there are scores of empty buildings in the city that aren’t generating any money. If he negotiates a deal for $80 in taxes, it’s still $80 Woonsocket didn’t have before.
Do you agree with him?