County Tax Case Nixed
The ongoing battle over the tax-exempt status of Warren General Hospital and the Rouse Estate is over.
On Tuesday, Warren County Court of Common Pleas Judge Greg Hammond granted the organizations’ motions for summary judgment and restored their tax-exempt status.
The attorneys didn’t talk about whether or not the hospital and the Rouse deserve to be tax exempt. The judge didn’t consider the five-part hospital utilization test (HUP) that is used to determine whether or not an organization is a purely public charity.
“The issue is a fairly narrow legal one,” according to attorney John Mehler, representing Warren General.
The board’s powers are enumerated in the Consolidated County Assessment Law and the hearing was all about those powers.
The case hinged on the actions that initiated the review of the tax status. All parties had agreed to throw out other procedural concerns and focus on the nature of the review.
The attorneys for the appellants – Warren General and the Rouse – argued that the board took action on its own – sua sponte – without formal action from a taxing body.
Both Mehler and John Owen, representing the Rouse, cited a letter from the board to the organizations. The language in that letter indicated, they said, that the board made the decision to investigate tax-exempt properties without formal authorization from a taxing body.
“The assessment board, on its own initiative, acted as judge and jury, and some would say, executioner,” Mehler said. “It has acted well beyond its authority as given by law.”
“Nowhere does it state that the board of assessment appeals has the authority to make a blanket tax-exempt revocation,” Owen said. “Someone who is responsible to the voting public must initiate an appeal. Would any taxing body bring this kind of an action against the Rouse Estate?”
“At best there was an informal meeting” between the Warren County Commissioners and the members of the appeals board, Mehler said. “There’s no suggestion that there was any official meeting – no agenda, no vote taken…”
The Rouse “is entitled to procedural safeguards,” Owen said. “The challenge should be brought properly.”
If the organizations were “afforded all of their (due process) rights… a different result could be obtained,” he said.
John Cambest, solicitor for the appeals board, said a series of meetings between the board and the county commissioners led to the board moving forward with considerations of tax-exempt status. “I think they were directed by the county commissioners,” he said.
Hammond asked Cambest if he believed the board had the authority to act without authorization from a taxing body. “I think the board did,” Cambest said. “I think that’s what the statute contemplates.”
Prior to the passing of the consolidated county assessment law, the county commissioners made up the board of appeals. “How would their argument hold up if the county commissioners were the board of appeals?” Cambest asked.
After several questions directing Cambest to defend his position by pointing to specific language in the law, Hammond was not convinced.
“What gave them authority to make a finding?” Hammond asked. “I haven’t heard a compelling argument.”
He said the members’ ability to act as impartial judges would be hampered if they themselves brought the case. “How can they conduct a fair and impartial hearing after they’ve come to a conclusion?”
Hammond said the six powers given to the board by statute do not include the power to initiate actions.
“The actions of the Warren County Board of Assessment Appeals were outside of the statutory powers and are null and void,” Hammond ruled. “I don’t view it as a close call. The Warren County Board of Assessment Appeals is a statutory entity.”
“The Rouse Estate is humbled to keep serving the public and is pleased with the outcome,” Owen said.
“On behalf of the hospital, we are very gratified that our position has been vindicated,” Board of Directors Chairman Tim Bevevino said.
“We’re pleased with the result,” Mehler said. He was looking forward to seeing all of the details in Hammond’s ruling. “I’m anxious to read the judge’s decision.”
Hammond’s ruling does not eliminate the possibility of future actions. “New appeals certainly can be filed and we’ll have to start the process over again,” he said.