By Roldo Bartimole
The two recent news stories dovetail so well that I couldn’t miss the implications. Neither can you.
The consequences are not good.
Congratulations to the Plain Dealer and Joan Mazzolini for giving us rich detail on the Cleveland Clinic’s reluctance to pay property taxes in her April 9 report.
The article reveals how the Cleveland Clinic avoids property taxes that would go mostly to the Cleveland school system.
Why? Because the Clinic insists, it is a non-profit institution and therefore doesn’t have to pay taxes. How fantastical can you get? Maybe the Clinic’s executives are too close to the drugs.
Mazzolini’s piece was reported after the other article, which grabbed my attention.
The article said that there are 41,887 millionaire households in Cuyahoga County, according to a study by TNS Financial Services.
That’s 41,887. No typo there.
One has to wonder how many doctors and retired doctors are among the lucky 41,887, and how many of those got their revenue, at least in part, working in the Cleveland Clinic, University and other hospitals?
You can bet plenty of them.
Of course, many other professions and businesses produce millionaires and multi-millionaires. We help them too with reduced taxes, especially in this day of tax abatements, tax exemptions and tax diversion via tax incremental financing (TIF, another form of abatement.)
Mazzolini quotes County Treasurer Jim Rokakis, who apparently has made this a crusade he’s not willing to allow to pass. She quotes him as saying that the lack of payment by the big money hospitals (she does not use that language) puts a burden on all the rest of us.
“‘Between the Clinic and UH, they’re spending over $1 billion in construction,” Rokakis said. “When you ask them to contribute an insignificant amount of money to help the schools, they balk,” writes Mazzolini.
Actually, Rokakis raised this issue before with the Clinic, its lawyers and former Mayor Jane Campbell. However, that trio got together to fend off Rokakis’ attempt to squeeze and embarrass the Clinic into giving some revenue via property taxes, about 60 percent of which go to the schools.
The Clinic instead promised $10 million in gifts to the Cleveland schools over a five-year period. I haven’t seen any proof that they’ve forked over any of that piddling amount.
Total revenue for the Clinic (2004 latest figures) was $3.9 billion. Can’t you spare a few dimes?
This is particularly galling because, according to economist Paul Krugman and Robin Wells, “The U. S. health care system is more privatized than that of any other advanced country, but nearly half of total health care spending nonetheless comes from the government.” The article (http://www.nybooks.com/articles/18802) said most health spending comes from two federal programs Medicare and Medicaid. You might say the hospitals and doctors are welfare recipients.
Therefore, the taxpayer is paying the Clinic’s high salaries and the taxpayers of Cleveland are making up for the Clinic’s non-payment of property taxes.
The Clinic has some 9,000 people making more than $50,000. While $50,000 is not a great amount, we don’t know how much more than $50,000 many of those 9,000 make.
The big guys, however, we know make much more.
Delos Cosgrove, CEO and president, according to a listing, was paid $1,753,245 in 2003 with $82,799 in benefits. Retirement for Dr. Cosgrove, we assume, will be very pleasant.
Others in the million-dollar salary club at the Clinic include Bruce Lytle at $1,319,558. The Clinic puts aside $42,647 in an annual pension benefit. That’s more than most Clevelanders make, for sure.
Victor Fazio got $1,106,182 with $42,440 set aside for retirement in 2004; Roger Mee, $982,412 with $42,200 in benefits; Raml Akhrass, $913,598, and $44,420 in benefits; Andrew Novak, $4857,727 with $49,800 in benefits.
Floyd Loop, Cosgrove’s predecessor, earned $1,682,829 with $80,764 in benefits in the 2003 listing.
He’s also listed as having a $3.5 million loan outstanding from the Clinic.
There were too many doctors making big bucks listed in the Cleveland Clinic Foundation’s 2004 Internal Revenue filing to be recorded here. The Clinic tax return is available on the Guidestar web site (http://www.guidestar.org) for anyone’s perusal.
Big money people – whether in hospitals, business, development or sports – find ways to shove their taxes off onto ordinary people. They have the legal (and other) resources to influence government at all levels.
Meanwhile, ordinary people have been experiencing a nightmarish situation here.
Policy Matters Ohio, a non-profit research organization, (http://www.policymattersohio.org/index.html) reported about recent income inequality in Ohio. The report is entitled, “Pulling Apart: Inequality Growth in Ohio.”
“The recession’s impact on poor and middle-income families lasted longer than usual, particularly in Ohio, which added just 3,600 jobs during 2005, a gain that amounts to less than a tenth of one percent in a job market that includes more than 5 million Ohioans. As of December 2005, Ohio’s job levels remained 172,800 jobs (3.1 percent) below the level at the beginning of the recession, more than three and a half years earlier in March 2001.”
In Cleveland, the economic recession was even worse than those suffered by Ohio workers as a whole was.
So the rich don’t simply get rich and the poor get poorer. The rich get very much richer and the poor get very much poorer and fall further behind.
Yet the tax burden on the lower end gets heavier, while those who have seem to get all the tax breaks. � The Clinic in 2004 paid Squire & Sanders $3,310,423. It also listed $1 million spent in non-taxable lobbying and another $250,000 in “grassroots” non-taxable lobbying. Whatever that is and whoever collects that influence money.
No one would want the Cleveland Clinic to move out of Cleveland though it has been moving some operations farther and farther into the burgs. It’s not likely it can move its vast Euclid Avenue operations away easily.
However, it tosses too much political weight around.
It’s time Cleveland started pushing back.
Mayor Frank Jackson has been going slowly in his first three months. One hopes that this isn’t merely political indolence and lack of thoughtful setting of priorities.
One of these priorities ought to be seeing that the Cleveland School system is well funded (along with what he’s doing to create some discipline in the schools).
Discipline isn’t only for students. Some of our elite citizens need to be disciplined too.
Jackson can start by asking the Cleveland Clinic and University Hospitals to begin paying at least part of their fair share of taxes – most of which go to the Cleveland schools. That’s a fight worth the effort for the Cleveland mayor.
You can finance the City of Cleveland and its schools just so far by finding new ways to tax traffic violators, another regressive way to raise government revenue.
Time to set priorities, Mr. Mayor.
Whatever Happened to Alex Machaskee?
We haven’t seen a single award since the Newhouses dumped him from his cushy job as publisher.
I mean it was a weekly adventure to wonder what Cleveland organization would curry favor with the Pee Dee by bestowing upon The Snake honors and tribute in the form of an Award. For this. For that. For anything they could imagine.
Not only that. You may not have noticed but Machaskee has been dropped from the board of the Cleveland Foundation. Now that hurts.
It hurts not to be loved. It hurts to learn that love came not from admiration, not from deep affection, but from the title one held.
Surely, Dick Pogue and the boys can find a way to ease the transition for Alex with a big going away party.
From Cool Cleveland contributor Roldo Bartimole roldoATadelphia.net
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