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Were lessons learned in MGH/city flap?

Where we stand

August 4, 2013
The Mining Journal

The dispute between the City of Marquette and Marquette General Hospital has caught our attention regarding the amount of taxes that will paid by Marquette General in the wake of its sale to Duke LifePoint Healthcare.

We are not at all surprised that there is a difference of opinion about how much will be paid in taxes. Given the fact that Marquette General Hospital will now be one of the largest taxpayers in the city of Marquette, it is no surprise that both sides would use all the tools available to determine what a fair taxable rate will be.

The city of Marquette only wants their fair share of the windfall that these new taxes will bring in to the city tax base. Marquette General has to make sure they are taxed on a basis which they believe accurately reflects the true value of their business. Considering how large the numbers are and the impact they will have on both the city and MGH, it is not surprising that both sides will take the necessary due diligence steps to guarantee a fair tax assessment.

What surprised us was some of the negative commentary made by some city commissioners about the issue. Mayor Johnny DePetro was quoted in our story addressing MGH's challenge to the tax evaluation saying, "They threw us under the bus. We never did see this bus coming."

Really Mayor DePetro, you did not see the bus coming? When you considered the huge dollar amount at stake, you assumed that both sides would come to an agreement on the first pass that would satisfy both sides?

We could have told you that would happen and if you asked any other city that has gone through a similar situation they could have told you it would happen.

Commissioner Fred Stonehouse said about Duke LifePoint that "This is an organization that came into our city and said all the right things. All that came out of their corporate mouth was how they are going to be partners with us and give us better health care and a tremendous amount of tax advantage for everybody, and then to come in and try to pick your pocket for a quarter of a million dollars, plus associated cost is really just very unfortunate."

We recommend that Commissioner Stonehouse recheck his pocket. We think he will that, at a minimum, he will have about $671,512 in new tax revenue even if MGH prevails with their appeal of the tax valuation. That amount would be a net gain to the city of Marquette's tax base. If MGH doesn't win the appeal the city of Marquette will realize a net gain in the tax base of around $904,870. The total tax amount paid by MGH including all other areas like the county, the school districts, etc. will come out at around $3.13 million. If they win their appeal, MGH will still add $2.32 million to the area tax base.

It should also be noted the MGH has plans for more than $200 million in future construction, which will continue to increase the hospital's value and the amount of taxes paid to the city of Marquette.

As we said in the beginning of this opinion, we understand why each side is fighting to have a fair tax assessment made. That includes the commissioners trying to maximize the city's tax base. What we don't understand is why commissioners representing the city would treat one of their largest taxpaying businesses so poorly in their comments. There are other ways of stating the case without using the denigrating language they used.

Several times over the last couple of years we questioned editorially why We Energies was treating their single largest customer, Cliff's Natural Resources, so poorly with repeated rate increase requests. We reported this week that Cliff's has decided to change their power supplier. They are ending their relationship with We Energies and they are now going to do business with Integrys.

We hope this will be a lesson for city commissioners - if you treat one of your best customers poorly, they may look for another place to conduct their business.

We feel that Duke LifePoint's purchase of Marquette General Hospital was a very positive development for our community. The new tax base they will provide is a welcome addition. Let the legal process for establishing a fair taxable value work itself out.

In the meantime, we hope city commissioners and representatives of MGH and Duke LifePoint work on creating a better line of communication between each other.

 
 

 

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