Bad Business Weekly Roundup: Hospital property taxes, Showboat runs aground and more

Government and business working hand-in-hand. What could go wrong?

By Tamer Abouras | The Save Jersey Blog

Many a decent idea has been railroaded by Garden State government and they’ve brought many a bad idea back from the dead. Here’s your collection for the week of July 20th, 2015:

Healthcare Hagglers

Photo credit: Ekem via Wikipedia
Photo credit: Ekem via Wikipedia

Have you ever caught yourself driving around, passing various hospitals and saying to yourself, “geez, we have too many of these?” Me neither. Your state government, however, feels the opposite. According to NJ.com, a long-standing tax dispute between the municipality of Morristown and Morristown Medical Center to pay property taxes.

The ruling, handed down by Tax Court Judge Vito Bianco, stated that non-profit hospitals are now so aligned with for-profit businesses that they should essentially no longer be considered charities by the tax code, but rather treated as businesses.

For his part, Barnabas Health CEO Barry Ostrowsky weighed in and said a bunch of things that read an awful lot like Democratic talking points in an interview with NJBIZ.com:

I do think there should be some approach, some way for those of us who manage not-for-profit assets, to make sure that we are not only contributing to our community in health care and human services, but contributing to our community financially.

[…]

I think it cries out for some level of legislative policymaking, and I suspect you’re going to see that over a short period of time. I wouldn’t want the full impact of the Morristown case to prevail statewide because that would mean many dollars of property tax that we’re not used to paying, but I also don’t think that the answer is zero, to be honest.”

So, it seems as though he’s had plenty of Kool-Aid — his humorous caveat about this horrible idea spreading across the state notwithstanding. And reliable state Democratic powerbroker George Norcross III, Cooper University Health Care Chairman, added his two cents, saying ” … New Jersey hospitals should be focused on the financial health and well-being of our communities as much as we are on the physical health and well-being of our patients, especially in urban areas where poverty and chronic health problems are so often linked.”

With state Senate President Sweeney and GOP Conference Leader Robert Singer weighing in with a joint statement that ” … hospitals have a responsibility to pay their fare share”  is there any doubt this will end well?

 The Showboat Runs Aground

I will admit, in the interest of full disclosure, that my status as a Rowan University alumnus has meant I’ve been laughing about this since I first read the news, but really, who didn’t see this coming?

Stockton University buys the old, defunct Showboat casino, situated on the rotting eastern end of the Atlantic City Boardwalk, and the general sentiment was “what could go wrong if we build an Island Campus?” Aside from the prospect of persistent tardiness, missed classes, and immersing college-kids in a pervasive culture of gambling, apparently agreements from 1988!

Democratic State Senator Jim Whelan (D-Atlantic City)
Democratic State Senator Jim Whelan (D-Atlantic City)

A dumb new bill is floating through the state Senate that would invalidate the original contract, between Caesars Entertainment and the then-owners of the property, Showboat Inc., which stated that it can only be used as a casino. The “bonehead idea,” as state Senator Shirley Turner (D-Mercer) called the purchase which led former Stockton President Herman Saatkamp to step down, has created a “mess” that sponsor, state Senator Jim Whelan (D-Atlantic), is trying to cleanup.

Caesars, for its part, wants no part of such an effort. And why would they? What’s the point of contracts if government funded colleges, with the backing of the government itself, can just sweep through and nullify them. And as long as that space is either dead or not being used for direct competition, that puts them in a stronger position. Given the state of the Atlantic City casino industry, it’s hard to believe that even politicians can’t see that they’re the ones who need all the help they can get.

Dave & Busted

Sometimes, it’s not easy being a free-market capitalist. You spend so much of your time defending the principle and right of businesses to make money that you feel awkward and hesitant to come right out and criticize one. I have no such qualms about telling you how much I hate this decision, however.

In short, unless Governor Christie miraculously saves us, the recent bypassing (by each house of the legislature) of a 56-year-old law banning the sale of alcoholic beverages at establishments with amusement games means we may soon have to endure the loud noises, subpar pub grub, and criminally overpriced (when you factor in the number of tickets needed to “win” them) game prizes of as many as five Dave & Buster’s, the adult Chuck E. Cheese’s.

The potentially hundreds and possibly thousands of jobs and as much as $3.75 million in tax revenues would be nice, to be sure, but haven’t we suffered enough to at least qualify for some cool gentrification?

Got any Bad Business tips? Send them my way: tamerabourasmusic@gmail.com or on Twitter, @iamtamerabouras.

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Correction: An earlier version of this post incorrectly identified Morristown Medical Center as part of the Barnabas Health System. It’s actually owned by Atlantic Health. We apologize for that error.

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