State auditors make no recommendations about granting a hospital tax-exempt status, but they have raised several questions.
A report to the Legislature's Audit Subcommittee also concludes that state lawmakers have very limited power to change the status quo if they choose to tackle it.Freedom from property, sales, corporate and use taxes is protected by the Utah Constitution, federal law, a long history of lawsuits and is intertwined with all other nonprofit groups, auditors said Friday.
The information was prepared for lawmakers considering forming a task force to scrutinize and possibly overhaul the system.
"I don't think it's our intent to ever say that the Legislature cannot become involved in an issue," Deputy Auditor General Doug West said.
"It's always been an issue. But it seems to me there's probably not a lot of new things (to be done)," he said.
Among the unanswered questions outlined by auditors:
- Have changes in Utah's health-care market changed the distinctions between investor-owned and nonprofit hospitals?
- What is "charity care," and should nonprofits be held to a set percentage to keep their status?
- Are the tax breaks justified by the benefit the hospitals give to their communities?
A letter will be sent to all state lawmakers summarizing the auditors' findings and asking for response.