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Home » News » Courts, Police, and Fire

Provena ruling sets cases in motion for other hospitals

Sat, 03/20/2010 - 7:15am | Debra Pressey, staff writer, News-Gazette.com
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SPRINGFIELD – More Illinois hospitals looking for a property tax break will soon be under the state Department of Revenue's microscope.

Revenue spokeswoman Sue Hofer said Friday the department has been holding on to several other hospitals' applications for tax exemptions as it waited for the state's high court to rule on the taxable status of Provena Covenant Medical Center in Urbana.

She declined to identify the other hospitals but said there are one to two dozen applications dating back several years that have been held while the Provena case was on appeal.

The Supreme Court ruling released Thursday morning found Covenant must pay property taxes for 2002, based partly on the Urbana hospital's failure to meet charitable standards established in a precedent-setting case from the 1960s. But the justices stopped short of specifying just how much charity a hospital would need to dispense to deserve a break from paying property taxes.

Nonprofit hospitals in Illinois have traditionally hung onto their tax exemptions for multiple years, because they don't have to reapply to their local taxing authorities unless they move, expand, are sold or change the use of their buildings, Hofer said.

Covenant's 2002 application to the Champaign County Board of Review, for example, was triggered by a change of ownership to Provena Health, a six-hospital Catholic health care system based in Mokena.

Hofer said the Department of Revenue reviews all hospital tax exemption applications and has delayed acting on some for which the Provena ruling might make a difference.

"We will now begin reviewing all of those applications in light of the court's ruling yesterday," Hofer said Friday.

Some other issues that remain clouded in the aftermath of the Provena ruling:

– Based on the property tax ruling, will the state Department of Revenue consider also revoking Covenant's exemption from sales and use taxes?

Hofer: "We look at sales tax exemptions regularly, but yesterday's Supreme Court decision will not necessarily trigger such an examination (of Provena's sales tax exemption) at this point."

– Where does all this leave the taxpayers of Champaign County?

The Supreme Court ruling covered only tax year 2002. Provena also applied for an exemption for tax year 2006, which was also denied by the Department of Revenue, but didn't apply for exemptions in the three tax years in between.

Under a Champaign County Circuit Court order that placed a hold on tax payment issues until after the high court ruled, the hospital wasn't billed for tax years 2007 and 2008.

Champaign County Supervisor of Assessments Stan Jenkins contends Provena will eventually owe Champaign County money for tax years 2002 through 2009 – though there's nothing to prevent Provena from filing for a new exemption on 2009 taxes payable this summer.

Provena spokeswoman Lisa Lagger said Friday that executives at Provena's corporate office are still in the process of determining the next step.

Champaign County Treasurer Dan Welch said 2009 tax bills won't be done until the end of April, so Covenant's bill for 2009 hasn't been determined. If the hospital owes Champaign County taxing districts payments for 2002 through 2008 tax years, plus interest, that would total $8.8 million, he said.

Welch said Covenant Chief Executive David Bertauski has requested a meeting with him for next Tuesday morning.

"I have a feeling this is far from over," Welch said.

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Categories (3):News, Courts, Police, and Fire, Politics and Government
Location (3):Champaign County, Local, Urbana
Tags (1):Provena Covenant Medical Center

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