Urbana residents will see an increase in property taxes following a 4-3 vote by Urbana School District 116 opposing a tax abatement to property owners.

Property owners will see a potential tax increase of 46 cents per $100 of assessed value, which would equal around a $231 increase on a $150,000 home, said Carol Baker, chief financial officer.

Board President John Dimit said the school district had been put in a tough position after Carle Hospital was pulled from the tax rolls last year. Presence Covenant Medical Center will be pulled from the tax rolls this year.

The law, which went into effect last year, allows hospitals to forgo property tax payments if they supply charity care of the same value. Between Carle and Presence, District 116 has seen estimated assessed property values drop 11 percent.

“Because of the drop in property value, tax rates must increase to keep revenues the same,” Baker said.

“It’s not our fault,” Dimit said noting that the board had already spent $3 million more than budgeted last year to cover the deficit left by Carle on the tax rolls.

The district previously held $10.8 million as an additional fund balance, but after a settlement with Carle, the district has about $5.1 million left in the fund. Furthermore, about $2 million of that fund is set aside to cover a deficit, leaving about $3.1 million for the board to spend as they see fit.

“After budgeting for salary increases … we have a net loss, even after the settlement,” Baker said.

On Feb. 11, the board met to discuss whether this money would be used as a tax abatement for property owners.

Board Member Paul Poulosky said that $3 million covered by the district last year was in itself a tax abatement. He voted against a tax abatement this year, saying that he’d rather see the $3.1 million spent on a one-time investment for the schools such as textbooks or other supplies.

Board Member Peggy Patten disagreed. She voted for the tax abatement as a way to show good faith to property owners; however, she said, she felt as if the board was put in an unfair position.

Eli can be reached at [email protected] and @eli_mur.

Editor’s note: A previous version of the article incorrectly quoted Carol Baker, chief financial officer, saying “Property owners will see a potential tax increase of 46 cents per $100 of assessed value, which would equal around a $231 increase on a $150,000 home.” The information was not a direct quote. The Daily Illini regrets the error.