Intermountain Health Care's long history of avoiding property taxes will take a strange twist next year, when residents of a sparsely populated Utah county begin paying extra taxes to take over one of its hospitals.
Residents of Garfield County, 200 miles south of Salt Lake City, voted overwhelmingly earlier this month in favor of a one-cent increase in sales tax to finance the takeover of 44-bed Garfield Memorial Hospital and Clinics.
Intermountain will donate the hospital in Panguitch, Utah, to Garfield County by late 2000. In 2001 the county will begin using the $500,000 per year in expected revenue from the tax increase to operate the hospital. Intermountain or another party may be hired to manage the facility, according to county officials.
Salt Lake City-based Intermountain is Utah's largest hospital operator, with 18 acute-care facilities. The system fought bruising legal battles to maintain property-tax exemptions for its hospitals in the state. Several Utah counties had challenged the exemptions of Intermountain hospitals, arguing that the facilities operated more as for-profit companies than tax-exempt public charities.
The Utah Supreme Court resolved the matter in 1994, when it upheld a set of tax-exemption standards that allowed the Intermountain hospitals to maintain their exemptions.
In 1998 the Internal Revenue Service challenged the tax-exempt status of IHC Health Plans, an Intermountain managed-care subsidiary. That matter has yet to be resolved.
Regarding Garfield County residents, who have had to cough up more tax money to support an Intermountain hospital, "There's a certain amount of irony there, but I don't want to bad-mouth (Intermountain)," said Maloy Dodds, a Garfield County commissioner who sits on the hospital's 12-member board.
Dodds said the county's 4,500 residents have little choice but to pay more taxes if they want to keep Garfield Memorial in operation.