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Hernando Today

Attorney Calls School District Case 'Frivolous'

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By TONY MARRERO

Hernando Today

Published: March 11, 2009

BROOKSVILLE - Attorney Gaylord Wood Jr. has been practicing law since 1962 and he admits nothing really surprises him anymore.
But Wood says he is baffled by the Hernando County School Board's lawsuit brought against Health Management Associates Inc., the parent company of Brookville and Spring Hill Regional hospitals, in an attempt to get back property taxes for the school's coffers.
Wood, of Bunnell, represents Hernando Property Appraiser Alvin Mazourek, who is also named as a defendant in the suit for giving HMA a tax exemption that the school district says is illegal.
Wood calls the lawsuit "frivolous."
"I think it's terrible that taxpayers have to pay for both sides of this suit," Wood said. "And if we're successful, we intend to pursue attorney fees against the attorneys who brought the case."
The school district has hired a lawyer to secure what officials have said could be as much as $1 million in back taxes from HMA. HMA leases the county land on which the two hospitals sit. In the case of Brooksville Regional, HMA also leases the building itself for $300,000 a year.
Mazourek's office determined HMA is exempt from taxes because the property is owned by the county. However, as per the leasing contract, HMA pays the county a lump sum in lieu of ad valorem taxes each year. The payments amount to about $400,000 for both hospitals annually.
In a complaint filed in the 5th Circuit Court last month, the district claims that HMA should be paying ad valorem taxes to the school board on the value of the land and the buildings. That value is nearly $60 million, according to property records.
Robert Nabors, the attorney hired by the school board to bring the suit, cites cases where private companies using government land for profit are still subject to property taxes.
Wood rejects those citations. The relevant fact, he said, is that a state law passed in 1980 says that in such arrangements, the leaseholder pays property taxes to the state Department of Revenue, not to local government, albeit at a much lower rate.
The school board, in turn, should be receiving its share from the state, Wood said.
"If school board doesn't think they're getting their fair share, they need to take it up with the Department of Revenue," Wood said.
The school board has never received any HMA tax money from the state, Nabors said.
However, the suit also alleges that the 1980 law is unconstitutional. The Legislature doesn't have the power to create that exemption, Nabors contends. Courts have found that the Legislature has overreached before in similar instances.
In that respect, this case has the potential to set a precedent of its own, Nabors said.
"We wouldn't have recommended it to the board if we didn't think it has a good chance of prevailing," Nabors said. "It's something that needs to be resolved."
Wood said that even if the school district does start to collect taxes from HMA, it will factor in the formula the state uses to determine how much education funding is sent Hernando's way. A corresponding reduction in those dollars makes the tax issue "a zero sum game," he said.
School board attorney Paul Carland said Wednesday that the district is confident the money would not be offset by reductions in state dollars.
An attorney for HMA did not return a call seeking comment.
The case has not yet been scheduled for a hearing. Both sides are expected to ask a judge to grant a summary judgment, avoiding a trial.

Reporter Tony Marrero can be reached at 352-544-5286 or lmarrero@hernandotoday.com.

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