MARSHFIELD, WI (OnFocus) – The City of Marshfield issued an update on the ongoing tax dispute between the City and Marshfield Clinic.
It was reported back in July of 2021 that Marshfield Clinic would be filing a lawsuit over alleged 2020 tax issues. Two properties owned by Marshfield Clinic were considered by the City to be taxable in 2020 while Marshfield Clinic believes the buildings should be tax-exempt.
According to City Administrator Steve Barg, if the Clinic were to win its lawsuit, approximately $1,080,000 would have to be refunded to the clinic by the city. That money would come from the City’s general fund reserves.
Barg also stated there has been no discussion yet as to what would happen to residents’ taxes in the coming years.
“There has been no discussion yet, but future budgets would undoubtedly have to include significant tax increases and/or budget cuts (roughly 7.5% tax rate increase, if deficit were funded entirely by taxes),” Barg said.
Barg said he doesn’t believe the legal battle between the two sides will end any time soon.
“We expect this legal case to take many months (at the very least) before it is settled, and to this point, we haven’t talked about specific areas that might be cut,” Barg said.
Reports have circulated that the City aldermen and women may have been contacted by Marshfield Clinic regarding the ongoing issue.
“Council members and other City officials are certainly free to have conversations with Clinic representatives, provided they do nothing that violates the State’s Open Meetings law (i.e. gathering in groups, etc.),” Barg said. “In fact, sharing thoughts and ideas with one another could be beneficial in some respects.”
According to the complaint, the Clinic details the property tax it was assessed based on the value of their assets at 1000 N. Oak Ave. and 1001 N. Oak Ave.
For the hospital building at 1000 N. Oak Ave., the complaint states Marshfield Clinic Inc. was assessed $61,858,400 for the land and improvements made to the land (i.e. buildings, other structures, parking areas, etc.). The tax associated with that parcel equated to $1,543,844.84.
The second parcel located at 1001 N. Oak Ave. was assessed for $50,161,200 which resulted in the tax payment of $1,251,898.33. Combined, the clinic had to pay $2,795,743.17 in property taxes for the tax year 2020 for their properties at 1000 and 1001 N. Oak Ave.
According to the complaint filed by the Clinic, after they were given the bill in December of 2020 by the City of Marshfield, they paid the taxes for both of the above listed properties in a timely manner.
The complaint cites Wisconsin State Statute 70.11 which notes Non-profit Hospitals as an entity that is exempt from property taxes.
The Hospital is located at 1000 N. Oak Ave, but other buildings including the Lawton Center for Research and Education and part of Marshfield Clinic are also located at this address. The other parcel contains the East Wing which houses a variety of areas, including recovery suites, Pediatrics, and Radiology.
For example, if Marshfield Clinic were to win its complaint, $880,000 worth of tax money paid by Marshfield Clinic and meant for Marshfield School District may need to be reimbursed or credited. Similar situations would occur for Wood County, the City, and Mid-State Technical College.
Barg stated he is keeping the Marshfield School District, Wood County and Mid-State Technical College all informed of the potential repercussions of a lost lawsuit. He provided the three entities with a verbal update last week.
A statement from Marshfield Clinic Communications Director John Gardner back in July of 2021 said the lawsuit is essentially a backup plan in case the Clinic and City cannot reach an agreement.
“The Health System has been working with the assessor to understand the basis for the assessments,” Gardner said. “While those discussions are ongoing, the Health System filed its action as required by law to preserve its rights if the parties are unable to reach appropriate agreements.”
The matter is scheduled to be discussed at the Oct. 12 Common Council meeting. That meeting can be live-streamed at the city’s website starting at 6 p.m.
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