Rep. David Hess, R-Hooksett, has a point when he says we ought to be having a discussion in the state about the tax-exempt nature of some of the institutions we call “non-profit.”

Hess believes some of them ought to be paying the state’s Business Enterprise Tax, which is currently levied on the payroll, interest and dividends of all private firms with at least $200,000 in payroll. All businesses now pay three-fourths of 1 percent, but Hess would lower the tax to two-thirds of 1 percent.

The proposal – which probably has scant chance of passage – would let those non-profits with less than $200,000 in “program service revenue” off the hook.

Very much on the hook to pay a huge chunk of money to the state treasury would be hospitals and private colleges.

You can bet those groups will trot out their local board members and lobbyists to talk up how much good they do in the communities they serve and what a hardship paying the BET would impose on their charitable missions.

That viewpoint has merit.

For instance, St. Joseph Hospital in Nashua reported on its 2011 income tax filing that it provided more than $83 million in charitable care that year. Sounds like a lot of good-deed-doing to us.

What the state’s hospitals and colleges won’t trumpet, though, is that their executives are some of the highest-paid people in the state.

Staying with the St. Joseph example, that same income tax filing shows that they paid several top executives more than $200,000 per year, and a couple exceeded $300,000 in total annual compensation.

Being honest, those sorts of compensation levels are what Hess and others really object to, and the BET proposal is an attempt to impose an income tax on large-scale nonprofits without actually imposing an income tax. The problem is that these super-nonprofits look like conglomerates and their officers – who often travel with entourages – are paid vastly more than most of the people they are set up to serve. They are “charities” in the same way that aircraft carriers are “boats.”

Hess is hardly the first person to bring up the issue of excessive nonprofit compensation.

“Hospitals get millions of dollars in tax breaks for being nonprofits,” former Gov. John Lynch, a Democrat, told lawmakers in 2011. “But according to their latest public filings, the top 200 executives of our 24 nonprofit hospitals made a collective $60 million.”

All of the state’s acute care hospitals – including St. Joseph and Southern New Hampshire Medical Center – would have to pay the tax as proposed by the Hess plan. So would colleges such as Rivier University in Nashua and Saint Anselm College in Goffstown.

Of the 10,000 organizations that register with the state as charities, about 200 of them would be subject to the BET under the Hess plan if it passes.

That’s a big if, however. The idea figures to receive major pushback from the nonprofit sector, which is not exactly small potatoes. Among the 30 largest non-government employers in New Hampshire, 13 of them are 501(c)(3) charities, Hess said.

“I was warned a long time ago this is the third rail and there would be a lot of opposition,” Hess said.

He’s right, and he might have more luck trying to win passage of an income tax or allowing the cities and towns in which these entities are located to levy a property tax on them.

All of those are discussions worth having, because many of those nonprofits sure don’t feel like charities.

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