A decision by the Illinois Supreme Court striping Urbana’s Provena Covenant Medical Centerl’s not-for-profit real estate tax exemption will reverberate across the state. Thanks to Capital Fax Blog for alerting me to the case.
Folks in Cook County have already been eying taxing hospitals. The Legal Assistance Foundation of Metropolitan Chicago filed a brief in support of ending the exemption.
This case may mean that any Board of Review can impose taxes on a hospital by removing its charitable exemption, if the Illinois Department of Revenue agrees.
Elgin’s Provena St. Joseph Hospital is part of the four-facility Catholic Church ownership group.
2nd Appellate Supreme Court Justice Robert Thomas concurred with the opinion.
The property tax bill in question amounted to $1.1 million.
Below is the reaction of the hospital to the decision:
Provena Covenant Officials Comment on High Court Ruling
03/18/2010Officials at Urbana-based Provena Covenant today released the following statement regarding an Illinois Supreme Court ruling that denied the Catholic hospital ministry exemption from paying property taxes:
“We are deeply disappointed that the Illinois Supreme Court has denied the property tax exemption of Provena Covenant Medical Center,” said Jon “Cody” Sokolski, Chair of the Board of Provena Covenant Medical Center.
“Provena Covenant Medical Center cares for all in our community who need our health services regardless of their ability to pay. Throughout this controversy, we continued to demonstrate that enduring commitment to Urbana-Champaign. In 2008, we provided more than $38 million in free care and other community benefits. Our goal is to carry on in our charitable works, despite the fact that this ruling restricts our ability to do so.”
David Bertauski, President and CEO of Provena Covenant, added,
“We are deeply grateful to those who support us, especially our dedicated employees who selflessly bring compassionate, faith-based care to our patients each and every day.
“We can only hope this troubling ruling prompts a dialogue among hospitals and elected officials to dialogue about not only how we define charity care but also how we better ensure that the people who need financial assistance get it. We will work to lead the way.”
In reading the decision, one deciding factor seems to be
“its funds are not derived mainly from private and public charity and held in trust for the purposes expressed in the charter. They are generated, overwhelmingly, by providing medical services for a fee.”
Another deciding factor was Provena
“likewise failed to show by clear and convincing evidence that it satisfied factors three or five, namely, that it dispensed charity to all who needed it and applied for it and did not appear to place any obstacles in the way of those who needed and would have availed themselves of the charitable benefits it dispenses.”
This part of the decision seems important:
“While Illinois law has never required that there be a direct, dollar-for-dollar correlation between the value of the tax exemption and the value of the goods or services provided by the charity, it is a sine qua non of charitable status that those seeking a charitable exemption be able to demonstrate that their activities will help alleviate some financial burden incurred by the affected taxing bodies in performing their governmental functions.”
In a dissent by Justice Ann Burke, she wrote,
“By imposing a quantum of care requirement and monetary threshold, the plurality is injecting itself into matters best left to the legislature.
“The legislature did not set forth a monetary threshold for evaluating charitable use. We may not annex new provisions or add conditions to the language of a statute.”
The wife of Chicago Alderman Ed Burke is, of course, a Democrat.
She “also disagree(d) with the plurality’s conclusion that Provena Hospitals was ‘required to demonstrate that its use of the property helped alleviate the financial burdens faced by the county or at least one of the other entities supported by the county’s taxpayers.’”