Wisconsin's nonprofit hospitals were exempt from paying more than $117 million in property taxes in 2006, says a new report from the Institute for Wisconsin's Future.

The lack of that money makes it harder for local governments to provide vital services, the report says. Nonprofit hospitals provide charity care, but so do for-profit hospitals that pay taxes, the report says.

The 124 nonprofit hospitals, which have a combined property value of more than $5.8 billion, posted nearly $1 billion in income in 2006, according to data the institute obtained from the Wisconsin Hospital Association.

Nonprofit hospitals historically served the poor almost exclusively, but "today these former almshouses are massive, sometimes luxurious institutions," the report says.

"We've got revenue shortages for all sorts of branches of state and local governments ... and the economy is changing very rapidly," said Jack Norman, research director for the institute. "But the tax system has not kept pace."

Wisconsin has a higher percentage of hospitals that are nonprofit than most states, the report says.

According to the hospital association, Wisconsin's hospitals in 2006 provided more than $200 million in charity care and had about $213 million in bad debt for patients who failed to pay for services.

Also, they lost nearly $600,000 on Medicaid patients, said George Quinn, a senior vice president of the association.

In addition, hospitals provide millions of dollars of services each year in free clinics, screenings and outreach programs, Quinn said.

Regarding the hospitals' nearly $1 billion in income, Quinn said, "Every organization, to remain financially viable, needs to have a margin over expenses. That amount is there for future growth, to stay ahead of inflation and fund new technology."

According to the institute's report, if Madison's hospitals had to pay property taxes, Meriter would pay $2.4 million and St. Mary's would pay $2.9 million. Those figures are conservative because assessors rarely keep current figures on the property values of nonprofits, the report says.

UW Hospital is not included in the report because it makes a payment in lieu of local property taxes. In 2006, that amount was $754,000, said UW Hospital spokesman Aaron Conklin.

The amount of charity care the hospitals provided that year, according to the hospital association: Meriter, $6.9 million; St. Mary's, $4.2 million; and UW Hospital $13.7 million.