MILWAUKEE -- A long-time perk is under fire as some question whether hospitals flush with cash really deserve a pass on taxes.

They're all nonprofits, which means they don't pay income tax, sales tax or property tax.

A new report shows how valuable those property tax breaks are and how much they're costing taxpayers.

Tom Landrum is a disgruntled taxpayer. So when South Milwaukee tripled his property tax this year, he decided to share his pain.

"I didn't want to pay the taxes, but you don't have a choice. You have to pay taxes, and I read about this thing called pay under protest," Landrum said.

Landrum paid in fives, singles and loose change. As Landrum struggles to keep up, some of the Milwaukee-area's most profitable businesses paid no property taxes at all.

"We are all paying a subsidy so these large hospitals can avoid paying taxes," said Jack Norman of the Institute for Wisconsin's Future.

Norman is a researcher for the Institute for Wisconsin's Future, a taxation think-tank. This week, his group released a report that concludes the tradition of granting nonprofit hospitals tax-free status costs Wisconsin's taxpayers millions in property tax revenue $117 million last year alone.

"A long time ago, they provided care for poor people because rich people had doctors came to their houses," Norman said.

"Hospitals are no longer in the business of charitable care as their main mission," Norman said.

St. Mary's, Milwaukee's oldest hospital, which started more than 100 years ago as a Mission of the Daughters of Charity, has evolved into a highly profitable health care conglomerate -- one the Wall Street Journal recently noted has more cash than the Walt Disney Co., Henry reported.

While St. Mary's lakefront location makes it among the most valuable property in the state, the hospital doesn't pay a dime in property tax to be there.

In fact, the Institute for Wisconsin's Future estimated that the Milwaukee-area hospitals sit on property valued at near $4 billion. If taxed, that could mean $60 million to $80 million in additional tax revenue.

Broken down, that's a tax break worth $2.5 million for Columbia St. Mary's, $5 million for Children's Hospital's, $5 million for Froedtert and a $9 million property tax break for Aurora St. Luke's.

Those hospitals deferred all questions to the Wisconsin Hospital Association.

"Why should non-for-profit hospitals have tax-exempt status?" Henry asked

"Well, I think you have to look at the broad, the very broad picture of charity care," said Bill Bazan of the Wisconsin Hospital Association.

Bazan said in addition to free care for the poor, nonprofit hospitals spend millions each year in community outreach.

He points to programs such as mobile dental clinic run by Columbia St. Mary's with funding help from Aurora and Children's hospitals. Each year, it provides oral care to 2,400 Milwaukee school children.

"I was nervous," seventh-grader Mason Hull said.

Hull had never seen a dentist before.

"If you look at the positive margins of every single health system in metro Milwaukee, those positive margins go to charity care, to serving the uninsured and underinsured," Bazan said.

But when hospitals don't pay property taxes, taxpayers must fill in budget gaps.

The Institute for Wisconsin's Future estimates those property tax breaks cost a Milwaukee household $81 a year and a Mequon household $125 a year.

In Wauwatosa, home of the Milwaukee Regional Medical Center, each household pays an additional $626 each year in property taxes because its hospitals don't. That number explains the brewing confrontation there.

The city of Wauwatosa is challenging Wheaton Franciscan Healthcare over a satellite of St. Joseph's Hospital on Mayfair Road. Wauwatosa said it houses doctors' and other commercial offices and should pay property taxes. It's a legal battle that's gone all the way to Wisconsin's Supreme Court. Its decision will have far-reaching implications, according to Henry.

"They're pacesetters. What Wauwatosa is doing is a wonderful example. It's pioneering in the state of Wisconsin," Norman said

But Norman said few cities can afford such a legal fight. He believes Wisconsin's Legislature must step in to require nonprofits to pay their fair share of property taxes -- whether or not they provide charity care.

"A for-profit company does get an income tax break for their charitable donations and ordinary people do to, but nobody gets a break on the property tax because of making charitable donations," Norman said

Friday, the Wisconsin Hospital Association released a statement challenging the report by the Institute for Wisconsin's Future, saying, "Their narrow analysis fails to consider the significant contribution our nonprofit hospitals make to their communities."

Congress studied it, but efforts to change the law have so far fizzled. And there's been no move in the state Legislature to change the tax status.