Morristown Medical Center To Pay $15.5M in Taxes to Morristown Over Next Decade

A landmark settlement was made Tuesday night in Morristown that could seriously alter the way hospitals and the towns they serve do business with one another.

After years of litigation, Atlantic Health System – parent company of Morristown Medical Center – agreed to pay $15.5 million in property taxes over the next decade that makes up for property tax appeals from 2006 through 2015, and covers taxes for 2016 through 2025.

The Morristown Council unanimously approved the agreement Tuesday night.

Of that $15.5 million, $5.5 million include penalties and interest to be paid in annual installments over the next decade.

On top of the settlement figures, from 2016 through 2025, approximately 24-percent of the hospital property will be taxed at an assessed value of $40 million, representing an annual tax payment of $1.05 million annually.

Morristown Medical Center, like other hospitals in New Jersey, has not needed to pay taxes based on a non-profit status. The town of Morristown contended that while the hospital itself may be non-profit, the businesses and entities inside of it, including doctors and practices, were not non-profit.

“This agreement benefits Morristown greatly,” said Morristown Mayor Tim Dougherty in a statement. “Taxpayers gain by having the hospital share a greater burden of the cost of providing municipal services, and the 10-year commitment provides a guaranteed revenue stream that allows the town to undertake plans for the future with confidence.”

“We are pleased that the agreement benefits both the town and Morristown Medical Center by providing clarity around financial obligations,” Atlantic Health System CEO Brian Gragnolati said in a statement. “Additionally, Morristown Medical Center plans to have a greater presence in the lives of our community members by offering enhanced health and wellness programs that are reflective of their needs.”