Most of New Jersey’s 71 acute care hospitals are nonprofit. But for the past several years cash-starved towns all over the state have been challenging those designations in court.

Neil Eicher, vice president of government relations and policy for the New Jersey Hospital Association, said back in 2015 there was “one Tax Court decision saying hospitals should be paying property taxes and after that ruling over 40 of our 59 nonprofit hospitals have been engaged in litigation with their local towns over property taxes.”

While the Hospital Association does not believe nonprofit hospitals should pay property taxes, Eicher said hospitals are willing to pay a community contribution fee to help pay for police and fire services.

Nonprofit hospitals already pay property taxes for restaurants, rented offices, parking garages and other for-profit entities that may be located on hospital property.

Eicher said a proposed law would cost the hospital industry about $20 million a year.

"We are voluntarily as an industry raising our hands and saying we accept this and we support doing this because we’d rather spend money that goes back into the community instead of spending money on legal fees," he said.

He said many hospitals already provide millions of dollars in benefits and services every year to the towns where they are located.

“For example, some hospitals pay for free Narcan for their police departments, or they pay for a new road to be paved, or they pay for a school nurse," he said.

Eicher said discussions are underway with the New Jersey State League of Municipalities to work out final details of the measure.

You can contact reporter David Matthau at

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