Providence St. Peter Hospital officials defend tax exemption in Olympia

Providence St. Peter Hospital officials are lobbying to keep an exemption to the business and occupation tax in Olympia.

To generate more money for municipal services, the city’s Finance Committee has suggested that large nonprofit businesses like Providence St. Peter should pay the same B&O tax rate as for-profit businesses.

Providence officials met Monday with the committee to explore a mutually beneficial “partnership,” as both sides called it, before any official decisions are made. CEO Medrice Coluccio defended the hospital’s value in the community when it comes to providing jobs and health care.

“We are the safety net,” said Coluccio, supporting a continued dialogue with the city. “We need to think about an alternative to removing the B&O tax exemption.”

Providence officials have estimated the exemption’s value at $375,000, and say the hospital’s charity programs offset the B&O tax exemption. Providence also says the money should be used toward health care instead of being diverted to the city’s general fund.

In 2013, the Olympia hospital donated $35.8 million worth of care and services, which was an increase of $20 million since 2010, according to data provided by Providence. The cost includes:

•  Unfunded portions of government-sponsored medical care

•  Free and discounted care for the uninsured or underinsured

•  Subsidized services such as behavioral health and a child sexual assault clinic

•  Education and research programs, such as student internships and residency training

Providence St. Peter Hospital is the largest private-sector employer in Thurston County with about 1,700 employees as of May 2014, according to the Thurston Economic Development Council.

City Manager Steve Hall said Olympia lacks the funding to adequately maintain buildings, roads and parks – or even replace an old fire truck, for example. The cost of city employee benefits has also climbed nearly 11 percent since 2004, according to city data, while there have been 60 full-time positions cut in the past five years.

“Part of our struggle is to figure out how to provide core services,” Hall said Monday.

In one example of a partnership, Olympia City Councilman Jim Cooper floated the idea of creating short-term contracts with the hospital for police services. Cooper said the committee will discuss potential next steps at the Sept. 10 meeting before any recommendations are made to the full city council.