A move is under way to challenge the tax-exempt status of the six hospitals in Lehigh County, according to solicitors for Salisbury Township and the Allentown School District.

At stake is an estimated $1.4 million in city, borough, school and county real estate tax breaks the hospitals currently receive as charitable institutions.

"We feel they shouldn't be tax exempt," Salisbury solicitor Arthur T. "Ted" Gillespie Jr. said yesterday, citing recent court cases that have decided some non-profit institutions were no longer public charities entitled to exemptions.

The health care industry has changed, with some hospitals reaping large profits, creating holding companies and for-profit businesses, he said. "At the very least, they should be questioned. "

That was the consensus, Gillespie said, of a group of solicitors from Lehigh County, the City of Allentown and the Allentown School District that has met in recent weeks to discuss the merits of such a challenge.

Lehigh County hospitals already pay property taxes on some holdings and argue that they should not be taxed further because of the charitable care and services they provide.

Those hospitals include Allentown Hospital, Allentown Osteopathic Medical Center and Sacred Heart Hospital, all in Allentown; the Lehigh Valley Hospital Center, Salisbury Township; St. Luke's Hospital, Fountain Hill; and Muhlenberg Hospital Center, Bethlehem.

"We think we're already being a good citizen," said Mimi Gehman, spokeswoman for Allentown Osteopathic. She said the hospital has contributed four or five times the $62,000 it is required to each year under special funding. It also pays some $20,000 in taxes on lots other than the one the hospital stands on.

"Hospitals continue to make great contributions to the quality of health and life in the Lehigh Valley," added Wanda Morgan, vice president of community relations for Sacred Heart.

As a Catholic health care facility, Sacred Heart "has as its hallmark community service and continues to assure medical care to all who need it regardless of ability to pay," she said. It also provides the latest advances in medical care, public education and screening programs to prevent premature death.

If their tax-exempt status would be revoked, Lehigh County would stand to collect another $238,200 from the six hospitals, based on the current assessed value of the land and the county millage.

Likewise, Allentown could collect $241,900 in city taxes and another $381,000 in school district taxes on the three hospitals in the city.

Salisbury would add another $27,100 in township and $222,000 in school district taxes to its coffers, should LVHC lose its charitable status.

Also, the City of Bethlehem would receive $37,700 from Muhlenberg; Fountain Hill would get $47,000 from St. Luke's; and the Bethlehem School District could collect $213,500 from both.

None of the municipalities or school districts had filed a formal appeal with the Lehigh County Board of Assessment as of yesterday, but Salisbury commissioners and Allentown school directors voted Thursday to participate in what they believed would be a county-wide examination of what hospitals do and don't pay in taxes.

Gillespie planned to write the letter to county solicitor Alfred K. Hettinger this week. He was "certain" that Salisbury School Board would join the move.

There was some dispute, however, concerning who would make the official request.

Gillespie and William G. Malkammes, solicitor for the city school board, understood that Lehigh County and the City of Allentown would seek a hearing before the Board of Assessment regardless of the support of individual municipalities or school districts.

In fact, the resolution passed by the school board read, "Be it resolved that the school district of the City of Allentown shall join with the County of Lehigh, the City of Allentown and other Lehigh county municipalities to request a review of the tax-exempt status of hospitals operating in the City of Allentown, Lehigh County, Pennsylvania, by the Lehigh County Board of Assessment Appeals and thereafter, if necessary, by Courts having jurisdiction. "