What would be the correct methodology to measure the impact of the change of a large hospital from nonprofit to private for profit? The direct impact would be a significant increase (early estimate is $7 million) in property tax revenues to local municipalities.No changes in hospital employment or output are expected..
Impact of Increase in Property Tax Revenues
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Since there would be no changes in employment or production levels, we don't want to run any analysis on the hospital sector itself. There is technically a change in direct hospital output though, since profit and property taxes are both a part of direct output - in OPI and TOPI, respectively. Those changes can be reported as direct changes to the hospital industry.
Regarding the profits themselves (OPI), we generally recommend reporting them as part of the direct effect but not modeling them in any way since we don't when/where/how those profits would be spent.
Regarding the local taxes, those could very well affect the local tax authorities' spending behavior. If the user is comfortable with assuming that those extra revenues will spur increased government spending, s/he could run them through the State/Local Gov NonEducation Institution Spending Pattern; this one is built into the system and can be accessed via Activity Options > Import > Institution Spending Pattern.Please let me know if you have any additional questions!
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