Urbana rejects over $100,000 from Carle Foundation Hospital

By Walbert Castillo

In an ongoing dispute between Carle Foundation Hospital and Urbana, the city is refusing to accept four grants, totaling $100,800, offered by Carle to cover the city’s costs for police and fire protection.

The two checks, which were sent in September and have since expired, amounted to $28,200 for fire protection and $39,000 for police protection, said Mark Schultz, Carle’s spokesman.

Recognizing the importance of police and fire safety, Carle said in a press release it hoped the checks would lessen the overall operating budget for the Urbana’s fire and police departments 

Seeing the checks as a “bribe,” Mayor of Urbana Laurel Prussing said it is inappropriate for Carle to send a check because it would mean favoring the opposing side during the lawsuit.

“You don’t get to pick and choose what taxes you pay for. When you get a tax bill, that’s your share, and you’re supposed to pay for the whole thing,” Prussing said. “It’s like receiving a bill from the doctor’s office; you can’t just tell them, ‘I will pay for 2 percent of it.’ You have to pay for the whole thing.”

 

Urbana questions legality

Before Carle was granted tax-exempt status, Danny Chun, spokesman for the Illinois Hospital Association, said there have been uncertainties in what the law requires for hospitals to meet a tax-exempt status.

“Over the past 10 years, there have been multiple court cases and lawsuits arguing what charitable purpose really means and where the hospitals qualify under the state constitution,” Chun said.

The Illinois Hospital Association has always contended that hospitals meet the charitable purpose requirements of the state constitution, Chun said.

However, Prussing argues that a charity is “an overall entity that obtains most of the money from charitable donations; however, hospitals are not charities. They’ve written a law saying they are, but it’s in conflict with the constitution.”

The Illinois General Assembly passed a law in 2012 that provided clear guidelines and standards for hospitals to meet tax-exempt status, which Carle met.

The law allowed non-profit hospitals to be docked the calculated value from charity care in local taxes, said Alderwoman Diane Marlin, Ward 7.

 

Urbana’s tax rate rises

Caught in a lawsuit between Carle and the city, citizens of Urbana are facing a 10-to-11 percent property tax increase, because 86 percent of Carle’s tax-exempt property is in Urbana.

“The medical center benefits 40 county regions in two states, yet one small city is expected to wear the financial burden for the entire region,” Marlin said. 

In order to maintain the Urbana facilities such as schools, parks, businesses and homes, Dannie Otto, member of the Concerned Citizens of Urbana, said when a major property owner like Carle has its property tax exempt, it shifts the burden onto everyone else. 

“For my home, which is a home that we’ve restored after 10 years, my tax bill went up about $1,000 dollars in 2012 to 2013,” Otto said. “And this will increase in the years to come.”

Observing the data from the 2013 summary of revenues and expenses produced by Carle, Otto, pointed out that the total revenue of Carle was $896 million and the excess of revenue over expenses was $196.8 million.

“From this data, Carle Hospital is making a net income of at least 25 percent, meaning they are extremely profitable with the money they have left over,” Otto said. “Most private businesses wouldn’t even dream of that much net operation income.”

Otto believes the amount of money going toward charitable care is a very small portion of the overall $196.8 million Carle made in excess revenue.

“The bottom line here is Carle used to pay taxes, Carle can afford taxes and Carle should once again pay their fair share of taxes that are necessary to keep this community a vibrant, wonderful place to live in,” Otto said.

Walbert can be reached at [email protected].