Hospitals, colleges to pay Baltimore $20.4M over six years 

Posted: 7:45 pm Fri, June 11, 2010
By Nicholas Sohr
Daily Record Business Writer

Hospitals, colleges and universities in Baltimore will pay the city $20.4 million over the next six years to stave off passage of the controversial “bed tax,” part of a slate of tax and fee hikes floated to plug a $121 million budget gap.

The $350-per-bed annual fee was directed at nonprofits, which do not pay property tax.

“On behalf of the people of Baltimore, I am deeply grateful that these committed City institutions have agreed to assist the City in this tough economic environment,” said Mayor Stephanie Rawlings-Blake in a written statement. “Their voluntary sacrifice and continued philanthropic support of our City and its communities is very much appreciated.”

The nonprofits’ payments — called payments in lieu of taxes — start at $5.4 million per year in fiscal 2011 and 2012, and decline gradually to $1.4 million in 2016. City officials estimated the bed tax would bring in about $4 million per year. The deal also imposes on the nonprofits an 8 percent energy tax — an increase of one-third — and a $4 tax on all land and cellular phone lines.

The agreement covers 10 hospitals and five colleges and universities.

The Johns Hopkins University will pay the largest share – $6.8 million over the six years. Two of its medical campuses, Johns Hopkins Hospital and Johns Hopkins Bayview Medical Center, will contribute another $4.3 million.

University of Maryland Medical Center will pay $2.5 million over the life of the deal, and Loyola College will pay $1.1 million.

“The recession has hit everyone, including Baltimore’s hospitals, who are and always will be a part of the city,” said Carmela Coyle, president and CEO of the Maryland Hospital Association. “Working with the mayor and City Council, this agreement helps the city address its fiscal challenges, provides budget predictability for hospitals who are also working their way out of financial difficulties similar to those the city faces, and retains hospitals’ tax-exempt status.”