As hospitals have gotten larger through mergers, expansions and acquisitions, at least one nearby school district is looking for some help with the 10-ton elephant in the room — property taxes.

Randy Ziegenfuss, the superintendent of the Salisbury Township School District in Lehigh County, claiming that these mega-institutions are no longer the small, community hospital nonprofits they once were, believes it’s time for them to ante up and help share the growing property tax burden in their communities.

Of course, this notion is not new. It has been around for decades, but aside from an occasional win for districts or municipalities, the nonprofits generally come out on top in court cases. To make matters worse in taking this route, the legal bill is pricey, costing taxpayer dollars that are already in short supply.

Salisbury has gone to court to challenge the county’s Board of Assessment as to whether Lehigh Valley Health Network lives up to the test of a strictly public charity, which is the main criterion for achieving nonprofit status. Salisbury wants $5 million in property taxes from LVHN.

Hospital officials say they are fulfilling the criteria for nonprofit status, file the necessary annual documentation and go through other hoops to satisfy local, state and federal regulators.

In the past decade, LVHN and St. Luke’s University Health Network have acquired area hospitals and built or are in the process of building new medical facilities in Carbon, Schuylkill and Monroe counties, along with their large footprints in Northampton and Lehigh counties.

Although most believe Lehigh Valley’s main campus is in Allentown, it is actually in contiguous Salisbury Township. Same goes for St. Luke’s, which most people believe is headquartered in the city of Bethlehem, but it is actually in the borough of contiguous Fountain Hill. St. Luke’s flagship campus is in the process of shifting to St. Luke’s Anderson in Bethlehem Township, where it has room to expand and is near major highways such as routes 22, 33 and 78.

While the Salisbury school district officials do not begrudge Lehigh Valley Hospital’s aggressive expansion, it does take issue with what it contends is a deviation from its charitable mission.

In this never-ending debate, school and municipal officials must weigh the pros and cons when nonprofit entities purchase heretofore taxable parcels, which then go off the tax rolls.

I am a strong supporter of area hospitals and the importance of their locations in our region. As I am sure you know, many areas of our nation would salivate to have the expanding health care system we see unfolding before our very eyes.

Naturally, there are some who wistfully long for the “good old days” when there were community or state-run hospitals in Coaldale, Lehighton, Palmerton, Stroudsburg, Hazleton and Pottsville, but I can also recall that some residents would pass up these hospitals and go to larger, better-equipped and better-staffed facilities such as Lehigh Valley and St. Luke’s.

Under the Patient Protection and Affordable Care Act, the Internal Revenue Service and the U.S. Treasury Office have issued specific guidelines for hospitals to maintain tax-exempt status:

Each must conduct a community health needs assessment at least once every three years; each must adopt both a written financial assistance policy and a written emergency medical care policy that comply with certain legal criteria; hospital facilities cannot charge patients eligible for financial assistance more than “amounts generally billed” to insured patients and are prohibited from using gross charges for patients eligible for financial assistance, and they cannot start certain “extraordinary collection actions” before making “reasonable efforts” to determine if the patient is eligible for financial assistance under the financial assistance policy.

If hospitals fail to meet these requirements, they are liable for significant consequences, ranging from a $50,000 excise tax for each hospital’s facility that fails to perform a needs test all the way to losing tax-exempt status.

From the state and local standpoint, to qualify for sales and use, income and property tax exemption, most governments examine whether a hospital provides some significant form of charity care. The type and definition of charity care or community benefit differs from state to state. In Pennsylvania, for example, it refers to “uncompensated goods and services.”

I suggest that hospital leaders and local officials meet and discuss their common concerns. Hospital officials are leery about any payment or “contribution” that could be misinterpreted as a tax payment. They see that as the proverbial foot in the door.

Some hospital boards have been open to payments in lieu of taxes (known as PILOTs), while others provide lists of community services and functions that the hospital actively sponsors and/or supports. Of course, let’s not forget the economic benefit that these hospitals provide in the form of good-paying jobs from which local and state governments reap income and sales tax revenues.

By Bruce Frassinelli | tneditor@tnonline.com