Exempting living units cost taxpayers less, CEOs say

Non-profit care home administrators in Marion County are disappointed and somewhat surprised that independent living units their operations include could be part of what commissioners from Marion County and Harvey County want to see on property tax rolls as an issue of fairness.

The administrators see the independent units as integral parts of their care systems that save government money, increase life quality, and help keep them in business. In some cases, they see better ways to help pay for community services.

The commissioners have voted to support efforts to have the state take property tax exemption away from non-profit independent living units because they say the sometimes expensive housing is most affordable by wealthier senior citizens, while their poorer neighbors who own their own homes do pay taxes.

In effect, they say, it is unfair to ask poorer persons to subsidize city and county services for persons living in the units who ought to be expected to share the burden.

The commissioners say their efforts are not aimed at persons who are under care in the homes. They have added that they are not aiming to increase taxes, but only to keep them fair for everybody.

The administrators’ reactions vary from defending their tenants who are not wealthy but sometimes in need themselves, to noting that it must be a mistake they were included on a list cited by Harvey County officials because their units and residents don’t fit the description.

Lu Janzen, administrator of Parkside Homes Inc. in Hillsboro, said the issue did come up last year in the Kansas Legislature. If the property-tax exemption had been taken away, she said, “We would just be devastated. It would be devastating to our community, too.”

Janzen and Linda Peters, administrator of Bethesda Home at Goessel, said independent living units at their homes are sought by residents who need care but are trying to stay independent as long as possible.

Janzen said, “They want to stay independent rather than go to the nursing homes. They are looking to Christian non-profit homes for security, safety and help. Most of them are handicapped and single.

“We have nurse call in every unit for emergency help. We take care of our own. They are trying to stay financially independent, but they need help with maintenance, snow removal, lawn care, things older people have trouble doing for themselves.”

Mike Ryan, administrator of Hillsboro Community Medical Center Long Term Care Unit, said he was surprised that apartment units at his facility would even be remotely considered as something separate for taxation.

He said, “If they were talking about separately built, more private homes or duplexes that people took care of themselves for really independent living, I would side with the commissioners. I think taxing those would be a good idea.”

Janzen said she knows of only one place in the state where Ryan’s description truly fits, and that’s at Lindsborg. The independent living units there are truly separate from the care-home campus. She said they were given at a separate location to the Lindsborg home, and that home has offered to work with local government in paying taxes on them.

Janzen has been discussing working with the City of Hillsboro and Mayor Delores Dalke to reach an agreement to pay something for services such as police and fire protection, she said.

Janzen said if Parkside were required to pass property-tax expense to persons in its independent living units, “there would be at least 29 who couldn’t stay independent any more” among the 69 independent living units.

This would put impossible pressure on the 60 nursing units, she said, because “one can’t get along without the other” in terms of room or finances.

“It would really, really hurt,” she said.

“This 29 would qualify for nursing-home care and Medicaid. Medicaid would cost government much more than property tax would help. The Medicaid rate is much lower than our costs. Not-for-profits try to operate at levels that keep our costs feasible, but sometimes we don’t break even. The more people who have a higher level of care, the more money we lose.

“Giving people the services they need to keep them independent longer saves money”

She used the analogy of a hospital having to take away an area of care, like surgery or the emergency room-it doesn’t make it work very well financially.

“That’s the way it is for us,” she said. “The independent living units enable the nursing units to work better.

“In our newer units, people can get around in a wheel chair, they’re handicapped accessible. They are provided with meals and a social life, and they are helping pay for that.

“If we can keep them independent, away from a higher level of care, for even one or two years, we are saving government a lot of money

“Who’s going to take care of the older people if we are taxed to the point we can’t bear it? Who will they want to tax next, the churches, the schools? Our society isn’t ready for this.”

Peters said these concerns make potential taxation “a hot-button issue.”

“It stirs a lot of emotions,” she said. “We try to be calm and reasonable in atmosphere, but people are coming away with hurt feelings.

“We’ve tried on our own campus to build modest, affordable housing for the people of our community. I don’t see that real luxury of any kind exists.

“Seventy-five percent of our independent-living people are single, most of them women of modest means-not of the highest socio-economic levels, but just the average people of our community.”

Peters said Janzen is right about Medicaid, and that most of these people would be put out of the independent-living units with taxation, and that would cost more for everybody.

“We have to write off $200,000 every year for Medicaid. Medicaid writes off 50 percent of the costs we should be paid for, and it has a big impact on us financially.

“Yet, we provide for every person equally, whether they can pay or they can’t pay. I would challenge you to come into our home and walk down the halls. I would dare you to try to spot individuals based on whether they pay or don’t pay their own bills.”

Peters said there is a minimum pay-back to a person of 50 percent of whatever they have invested in an independent-living unit when they leave it, usually for full nursing care. The money is applied to the nursing-home bill with any left paid to a person’s estate if they die, she said.

Peters said Bethesda doesn’t charge an application fee for independent-living units, and she doubts many non-profit homes do.

“We don’t discriminate against anybody, and we do a lot for free on the nursing side,” she said. “People aren’t thinking about the alternatives to this because they normally don’t have to deal with it.

“We do pay taxes-sales taxes and employment taxes. We don’t get a free ride.”

Peters and Janzen said their employees impact their communities positively, and so do the homes themselves.

Janzen said Parkside’s independent residents are volunteers for many activities needed in Hillsboro, and they do most of their shopping in town.

Peters said Bethesda “enhances life for the whole Goessel community.” She said the home provides a butterfly garden and walking path “that I see many people in our little community use.”

Peters said communities in the county that are giving tax abatements for private companies to move in should stop to contrast that situation with the non-profit care homes. She said even with abatement, if the bottom line of profit isn’t there any more the company will move or fold.

“We’ve been here for 104 years,” she said, “and we’re not going to go anywhere else.”

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