Clarify this 'loophole'

By The Gazette Editorial Board

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It is clear to us that nursing homes, even non-profit nursing homes, aren't just residences. They are businesses that offer housing and many other services to clients in exchange for money.

It doesn't make sense to consider these operations residential property and give them a 50 percent tax break, as one big chain has been pushing for.

The “loophole” in Iowa law cited by Care Initiatives, Iowa's largest non-profit nursing home chain, isn't a loophole. Instead, it effectively squeezes rural counties with increasingly limited resources.

But given the split in how county officials are interpreting the state statute, it appears that a state attorney general's ruling or even a legislative fix is in order.

Clarifying nursing homes' classification will ensure consistency across the state - in communities and between nursing home providers.

It could save significant public dollars that might otherwise be spent on appeals.

And clearing up the law will discourage any possible strongarming of small communities that fear nursing home groups will just pack up and move if a county declines to slash the care facility's property tax.

Lawmakers should close the “back door” to Iowa law that has led 20 Iowa counties and cities to accept one care provider's properties as residential property - costing those communities nearly $620,000 in tax revenue.

Fifteen more communities have denied similar Care Initiatives requests; those cases are pending appeal.

One official recently told a Gazette reporter the cost of appeal and a possible lawsuit is one reason his county won't fight the requested change to the residential tax rolls: “We don't have the capacity to take this to court,” Harrison County Assessor Dennis Alvis said, although he disagreed with the county Board of Review's decision to change the status of the Dunlap Nursing & Rehab Center to residential property.

In their petitions, Care Initiatives cites a law allowing non-profit organizations that provide “land and buildings that are used primarily for human habitation” to be classified as residential properties.

But habitation is only one of the services offered by Care Initiatives' facilities, which include round-the-clock nursing, meals, physical therapy and other services.

In those facilities, it's Care Initiatives that pays the property tax, not the residents. It's inappropriate to lump those care centers in with legitimate residential properties.

We can see how some communities and counties could be uncertain about how to interpret the letter of this disputed law, but don't believe the statue's intent is to define non-profit operations as residential. Its uneven application warrants some clarification.

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