Long Island hospitals took $4.8 billion in property value off tax rolls, increasing taxpayer burden

NYU Langone Health opened a new outpatient care center in Garden City in 2024, consuming a former Sears occupying a whole block of Franklin Avenue.

The hospital system spent $170 million converting the 260,000-square-foot department store into a medical facility with a market value of $35.7 million, tax records show.

Because NYU Langone is a nonprofit organization, it’s exempt from paying taxes on the parcel — removing about $784,000 in combined taxes from the county, town, village and school district, according to Nassau County records.

The booming hospital sector on Long Island, while opening healthcare capacity, is also taking more property value off the tax rolls, increasing the burden on other taxpayers. And while few question health systems’ nonprofit status, they’ve grown so much that the charity care justifying their exemptions is being scrutinized.

A Newsday analysis of property tax records found that nonprofit hospitals removed $4.8 billion in full market value from Long Island’s tax rolls in 2025, up from $2.3 billion in 2015.

As health systems build new centers and fill old shopping malls, the number of parcels owned by hospitals claiming a property tax exemption has grown from 260 in 2015 to 301 last year, including numerous sites that currently serve no direct medical or healthcare purpose.

These hospitals are not required to pay tens of millions of dollars annually in county, town, city, village and school district property taxes because of these exemptions, roughly two-thirds of which would otherwise go to school districts across Long Island. To ensure the districts remain solvent, assessors must make up the difference by collecting additional tax from nearby properties, including single-family homes.

"It shifts the tax burden onto people who are paying taxes," said Elizabeth Plummer, a professor and taxation expert at Texas Christian University, who has published research on hospital tax exemptions. "There’s a lot of evidence [hospitals] aren’t providing the kind of charity care they’re supposed to to justify the subsidies."

Roughly 6 miles north of Garden City, NYU Langone is opening another medical facility in a former Lord & Taylor in Manhasset. That complex, including the adjacent parking lot, carries a market value of nearly $50 million, with the exempt amount worth about $38 million, or about another $1.2 million in property taxes no longer benefiting local governments and schools.

Earlier this year, the hospital system announced plans for a new multibillion-dollar hospital in Melville, including 500 beds and a 1-million-square-foot academic medical center. It will be the first new hospital on Long Island since 1980 — and would remove substantial property from the tax rolls.

The two properties slated for the development generated roughly $2.4 million in property tax revenue this year, including more than $1.5 million in school taxes, records show.

"NYU Langone is deeply invested in the communities where we provide safe, high-quality care," NYU Langone spokesman Steve Ritea wrote in an emailed statement to Newsday, provided after this story initially published.

"Our dedication to these communities is ingrained in our mission," he said, noting that 25% of the system's total expenditures, or $3.7 billion, were "community benefit contributions," which are generally defined as involving subsidized care and financial assistance to patients.

Despite the need for healthcare, the tax exemptions sometimes squeeze local communities, according to State Sen. Alexis Weik (R-Sayville), who introduced a bill last year that would require nonprofit hospitals to pay 75% of their property taxes to the municipality where they're located.

"Municipalities across New York rely heavily on property tax revenues to fund essential services," Weik wrote in the sponsor’s memo for the bill, which has not advanced. "While nonprofit hospitals play a vital role in delivering healthcare, their tax-exempt status often results in significant revenue losses for local governments, especially in smaller or fiscally strained municipalities."

Long-standing exemptions

The tax-exempt properties now owned by hospitals on Long Island range from emergency rooms and surgical centers to office buildings and parking garages to vacant lots and residential houses.

Hospitals have been exempt from local property taxes in New York since at least 1896, but the current tax exemption was codified by the State Legislature in 1981. Hospitals receive these exemptions alongside nonprofit religious, charitable and educational organizations, according to state law.

It shifts the tax burden onto people who are paying taxes.

— Elizabeth Plummer, taxation expert, describing hospital tax exemptions

Critics of nonprofit hospital tax exemptions say that modern hospitals and healthcare systems bear little resemblance to the charity-care institutions that began receiving them in the late 19th century.

Elisabeth Benjamin, vice president of health initiatives at the Manhattan-based Community Service Society, a nonprofit advocacy group that aims to improve access to healthcare, said that over the past two decades, hospitals in New York have "gotten bigger and stronger and more consolidated."

"They began to look more like commercial corporations, paying C-suite salaries," Benjamin said. "If we were having a do-over, I think we’d question whether these hospitals are acting like nonprofits."

But Thomas J. Quatroche Jr., president and CEO of the Healthcare Association of New York State, a lobbying organization, said that even as hospitals have become bigger and more complex businesses, they still serve largely the same function in the community.

It’s up to the taxing jurisdictions, he said, to decide if the exemptions are beneficial to the community.

"The mission hasn’t really changed from then to now," Quatroche said. "Our ability to care for people, and the cost of doing that, has increased. Healthcare has improved since then."

Fair share

The Lown Institute, a Massachusetts-based healthcare think tank, reported that 132 nonprofit hospitals in New York received a combined average of $2.4 billion in tax exemptions annually between 2020 and 2022, including $723 million in property tax exemptions. Nonprofit hospitals are also generally exempt from state and local sales and income taxes.

New York law requires nearly all hospitals in the state to either be operated as a nonprofit or as a publicly owned entity. Of the 158 community hospitals in New York, 136 are nonprofit, 22 are publicly owned and none are for-profit, according to the health policy research organization KFF.

The 132 New York hospitals studied by the Lown Institute combined to spend $3.5 billion on average annually on what the institute calls community benefit, which includes subsidized health services, financial assistance for patients and community health improvement services.

New York’s $1.1 billion "fair-share surplus" — the measure of how much community benefit exceeds tax exemptions — was the highest among the 20 states included in the Lown Institute report.

Three Long Island hospitals — North Shore University Hospital, Long Island Jewish Medical Center and South Shore University Hospital — were among the hospitals in New York that spend the most on community benefit relative to tax breaks. All three of those hospitals are affiliated with Northwell Health. The report says North Shore University Hospital — with a $217 million surplus — and Long Island Jewish Medical Center, $152 million, had the two largest surpluses in the United States.

"Particularly on Long Island, where we have deep roots and long-standing relationships with the communities we serve, we view community benefit not as an obligation tied to our tax-exempt status, but as central to our mission," said Barbara Osborn, Northwell’s deputy chief public relations officer, in an emailed statement.

Ritea, the NYU Langone spokesman, said that system offered $91 million "in support for community-based programs," including a free clinic in Hempstead, training in opioid overdose response and infant CPR education.

St. Francis Hospital & Heart Center, in Roslyn, had the largest deficit of community benefit spending relative to tax exemptions — $35 million — of any Long Island hospital, according to the Lown Institute. The organization declined to provide specifics on how it reached its conclusion on St. Francis.

"St. Francis Hospital questions the methodology used by the Lown Institute, which does not capture the full range of ways hospitals support their communities," said Jackie Wong, director of public relations at St. Francis. "We remain committed to improving the health of our communities both within and beyond the walls of the hospital."

The Healthcare Association of New York State added up the amount of community benefit hospitals reported to the IRS and found that Long Island’s nonprofit hospitals in 2023 provided nearly $1.9 billion, including cost of care for people in need; subsidized care; and services to low-income, elderly and underserved communities.

"There are many hospitals that are doing way more than their tax exemption, and there are many that are not," said Vikas Saini, president of the Lown Institute. "It’s a big business, so it’s natural for everyone to ask if there’s this huge swath of money off the books."

Parking lots and a credit union

Tax records show that Long Island hospitals claimed tax exemptions on 91 properties actually classified as hospitals, but they own many other types of properties that they also claim as exempt from property taxes.

There are at least 84 office and professional buildings; 31 single-family houses; four apartment buildings; 12 parking lots or garages; 15 lots with paving, blacktop or fencing used with banks and office buildings; and 24 vacant properties, Newsday’s analysis found.

Those property classifications reflect how they’re reported in the tax data, not necessarily how the hospitals use the properties.

Some hospitals own single-family residences and apartments to house staff and students. For example, St. Francis Hospital has used 39 Oaktree Lane in Flower Hill as housing for religious sisters who work at the hospital. NYU Langone Health owns Wedgewood Apartments and Nassau Towers, two residential facilities for the NYU Grossman Long Island School of Medicine in Mineola.

Huntington Hospital has used houses near its campus as offices. And Northwell Health uses a building classified as a "seasonal" residence, 153 Doctors Walk in Cherry Grove, on Fire Island, as a medical office.

The nonhospital properties on Long Island had an estimated full market value of nearly $1.4 billion, according to Newsday’s analysis.

State law allows hospitals to claim properties other than the actual hospital facilities as exempt from property taxes as long as the property is being used in service of the hospital’s mission.

"I think the calculus for the community benefit is an individual decision between municipality and hospital," Quatroche said. "The municipality has to weigh the economic benefit against the tax benefit, whether that’s dollars or that’s expanded healthcare access for the community."

NYU Langone owns a small building at 194 First St. in Mineola that houses a branch of the NYU Federal Credit Union. The property has an estimated full market value of $273,857 and an estimated tax savings of about $11,000, including about $8,900 in would-be school taxes, according to Newsday’s analysis.

Another property that has a tax exemption for nonprofit hospitals, a commercial building at 36 Park Ave. in Bay Shore, is the headquarters of International Student Exchange, a nonprofit that facilitates study abroad programs for high school students, records show. The organization didn't return a request for comment.

That property has an estimated market value of $2.9 million, with the exempt amount worth about $1.4 million, Newsday’s analysis shows. The estimated tax savings for that property and others in Suffolk County were not available.

School district leaders were hesitant to speak about the issue of hospital property tax exemptions. Several didn’t return calls for comment.

The West Islip Union Free School District, among the districts that didn't respond to Newsday’s requests, is one of those most impacted by property taxes removed by nonprofit hospital exemptions. Good Samaritan Hospital owns 14 parcels within the school district, with a full market value of more than $770 million.

The school district’s budget for the 2024-25 school year was $138.8 million, records show. Of that, $93.4 million came from property taxes.

The bill sponsored by Weik, who represents West Islip, has been sitting in a State Senate committee since January. It would require nonprofit hospitals to pay a significant portion of their property taxes, though it would exempt hospitals that have other arrangements, like a payment in lieu of taxes agreement.

"Requiring nonprofit hospitals to contribute seventy-five percent of their annual property tax obligation strikes a balance between preserving their nonprofit mission and ensuring that municipalities are not overburdened by the cost of supporting critical services," Weik wrote in her sponsor’s memo.

The senator did not return calls seeking comment for this story.