Taxing Providence-related medical facilities in Lacey gets icy response from council

The idea of making Providence-related medical facilities in Lacey pay business and occupation tax didn’t get far during a work session discussion that followed Thursday night’s council meeting.

In fact, the entire discussion drew a sharp rebuke from Councilman Jeff Gadman.

Deputy Mayor Cynthia Pratt, filling in for Lacey Mayor Andy Ryder, raised the idea of making Providence pay B&O tax on its medical facilities in Lacey.

The nonprofit Providence Health & Services of Renton is probably best known for its hospitals, including Providence St. Peter Hospital in Olympia. But Lacey also is home to some Providence Medical Group clinics, including a relatively new one in Hawks Prairie.

There is precedent for making Providence pay B&O tax, but in Olympia, not Lacey, City Manager Scott Spence said. In October 2014, for example, the Olympia City Council voted unanimously to remove the B&O tax exemption on Providence St. Peter Hospital.

Nonprofits are exempt from paying B&O tax in Lacey, according to Lacey Municipal Code.

“I don’t see any reason to change what we do,” Gadman said.

Councilman Virgil Clarkson pointed out that Lacey isn’t home to that many Providence clinics, questioning how much revenue would actually be generated by making the nonprofit pay a B&O tax.

“I don’t want to ruin the relationship we have with them,” Clarkson said about Providence.

Gadman ended the conversation by calling the entire discussion inappropriate, largely because it was part of a hastily created work session agenda item. He called it a “pencil agenda item.”

“There’s no way we can possibly get enough information at this setting,” he said.

This story was originally published October 9, 2015 at 1:24 AM with the headline "Taxing Providence-related medical facilities in Lacey gets icy response from council."