Updated: Covenant, Carle both get property tax exemptions from state

Updated 9:09 p.m. Friday.

URBANA — Both Urbana hospitals have won property tax exemptions from the Illinois Department of Revenue, with the help of a new Illinois law passed last summer that set new standards for hospitals to qualify.

Carle Foundation Hospital has received exemptions on the majority of the applications it filed for properties for tax year 2012, and Carle spokeswoman Jennifer Hendricks said Carle expects to receive approval on the others that are pending.

Provena Covenant Medical Center has received exemptions for two tax years, 2004 and 2006.

Provena's application for an exemption for the 2010 tax year is still pending, according to Revenue spokeswoman Sue Hofer.

Provena now stands to get a refund on the taxes it paid for 2004 and 2006, about $2.4 million total, according to Champaign County Treasurer Dan Welch.

Nearly all the money went to an Urbana tax increment financing district, he said.

Carle's tax bill for this year hadn't been determined yet, but Carle paid $3.1 million on just four parcels that have been involved in the long-standing tax exemption case, Welch said.

Carle won't have to file a new exemption application beyond the 2012 year, but will have to recertify in subsequent years that it is still meeting exemption requirements under the new state standards, Hofer said.

Provena spokeswoman Lisa Lagger said Provena officials are "deeply gratified" by the Department of Revenue's determination.

"Because we are dependent on every ounce of revenue to fund our healing mission, we will be working with county Treasurer Welch to address return of taxes paid by the medical center while the exemption issue was pending," Lagger said in a written response to The News-Gazette.

"In 2012, the impact of our charitable works within the Champaign-Urbana community totaled over $12.5 million, and we will remain staunchly committed to returning the optimal value of our exemption for the benefit of all we serve," she said.

Denied a charitable tax exemption in a 2010 Illinois Supreme Court ruling based on a single tax year, 2002, Covenant met the standards for an exemption — and so did Carle — under Illinois' new state law, Hofer said.

Under Illinois' new law, to qualify for a property tax exemption the charitable activities hospitals conduct must add up to at least as much as the value of their property tax exemptions.

The law also has broadened what counts as charitable activities beyond free and reduced care for the needy to include portions of hospital bills the Medicaid program doesn't cover for patients in that program, and disease management and prevention programs for low-income people.

Hofer said the Department of Revenue hasn't denied a single exemption application from a hospital under the new law.

Meanwhile, Provena's tax exemptions for some other tax years prior to 2012 remain undetermined, Hofer said.

Lagger said Provena plans to file a new exemption application this year.

Hendricks said the Department of Revenue ruling on its 2012 tax year doesn't affect a lawsuit concerning its tax exemption for previous tax years that remains pending in Champaign County Circuit Court.

"We appreciate that the Department of Revenue is following the new law and considered Carle's significant financial contribution to the community," Carle said in an emailed statement. "It is extremely important that Carle sustain its resources so it can continue serving the health care needs of everyone in the community, regardless of their ability to pay."

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