The wallet of the Marshfield (Wis.) Clinic is under siege in the Wisconsin Legislature, where a recently introduced bill would bar the giant clinic from applying its property-tax exemption to its new facilities.
Marshfield is a 525-physician group practice operating 34 clinics throughout the state. It enjoys a unique property-tax exemption for being a not-for-profit medical research foundation.
But a proposed bill would limit the clinic's tax exemption to its main clinic and central research facilities at its headquarters in Marshfield.
The idea is to keep Marshfield from pulling clinics off the tax rolls as it acquires or builds new ones.
"It is unfair to the municipalities," said state Rep. Tom Springer, a Democrat from Mosinee, Wis., who introduced the legislation last month.
William Hocking, M.D., Marshfield's president and chief executive officer, said research goes on throughout the clinic's network.
"I don't think that it's very sensible legislation," he said.
One clinic that would be affected by a change in the law is Wausau (Wis.) Clinic, a 73-physician group acquired by Marshfield in October (July 28, p. 17).
Its officials are planning to meet with Wausau city leaders to talk about exercising their tax exemption there. But Hocking said that won't mean the clinic will get off scot-free. Instead, Marshfield would make a $350,000 payment in lieu of taxes. That annual amount would be roughly equal to the property taxes the Wausau Medical Center currently pays, Hocking said.
Marshfield doesn't pay property taxes on six of its clinic sites in Marshfield, Colby, Chippewa Falls, Ladysmith, Minocqua and Stratford. Instead, it makes annual payments in lieu of taxes totaling $869,000 to the six locales. The lion's share, $758,000, goes to the city of Marshfield.
Marshfield pays property taxes at 28 other clinic sites.
The clinic had revenues of more than $200 million in 1997; profit data weren't available.
Hocking said Marshfield considers asking for the local tax exemption when it buys a new clinic or makes substantial improvements to one. Marshfield hasn't asked for the tax break in communities where the financial benefit is small.
Jim Jacobson, mayor of Mosinee, said his city of 4,000 has refused since 1991 to grant Marshfield a tax exemption, although he knows the city risks a legal challenge.
Putting Marshfield's five outlying clinics back on the tax rolls would mean about $270,000 in annual property taxes, Springer said.
Springer's bill has the support of some local politicians, including Marshfield Mayor Richard Daniels, who said he wants to see the bill expanded to put more of the main clinic's property in Marshfield back on the tax rolls.
Daniels said Marshfield's payment in lieu of taxes hasn't kept up with what its property taxes would be, an amount he estimated at $1.5 million a year.
"What happens is that the people who do pay county tax, school tax and city tax end up subsidizing the Marshfield Clinic because they aren't paying their fair share, and we have to pick up the slack," Daniels said.
If Springer's bill survives the obstacle course of legislative committees, it could be voted on by April.