Prussing pressing case against Carle tax exemption

Prussing pressing case against Carle tax exemption

URBANA — Mayor Laurel Prussing is continuing to take a strong stand against a state-mandated property tax exemption for Carle Foundation Hospital, and she plans to ask for support from local lawmakers.

She said last week that a number of approaches could be taken to fix what would become a $830,000 budget problem for the city: Either the legislation needs to be changed, or the law needs to be challenged in the courts.

A state law passed last year made Illinois health centers exempt from property taxes if they can show their "charity care" exceeds their tax payment. Champaign County taxing bodies expect to lose more than $6.3 million in property tax revenue from the exemption — Urbana taxing bodies alone expect to take nearly $4.6 million of that loss.

If it comes to it, Prussing said, she would consider filing a lawsuit to challenge the tax-exemption law. Given how quickly the matter threatens to have financial impact in Champaign County, she said, she might do so sooner rather than later.

Prussing contends that Urbana is being disproportionately affected — Carle's charity care extends into a 25-county region, she said, and Urbana's taxing bodies will be footing 83 percent of property tax bill, even though it only has 3 percent of the population in the region.

That is precisely the situation state Rep. Naomi Jakobsson, D-Urbana, hopes to correct with new legislation. She said she is working on a bill she hopes to have completed by today.

"I think that when we look at the various services that people from all over are receiving, we need to make sure that it's not disproportionately affecting Urbana," Jakobsson said.

A spokesperson for Carle declined a request for comment on Monday, but in a post on the hospital's website, Carle chairman Phil Blankenburg said local elected officials who have been speaking out against the legislation have it wrong. "The true Carle effect," he said, is $32 million in discounted or free heathcare spread among nearly 20,000 patients last year alone.

That's in addition to a 5,900-employee and $500 million payroll, $78 million in deals with local businesses and an Urbana construction project that has provided 1,500 jobs and $100 million in economic impact.

In 2012, 4,400 Urbana residents received a total of $5.6 million in charity care, he said. Care for Champaign residents totaled $8 million.

He said Carle funds training programs at Parkland College, and it funds Urbana-based agencies like Cunningham Children's Home, Eastern Illinois Foodbank and Crisis Nursery.

"When you consider the levels of charity care and community benefit, the economic impact of jobs and local spending, and the effect of thousands of people visiting our community each year for health care services, the total benefit to the community far outweighs the property tax exemptions," Blankenburg wrote. "That's the true Carle Effect."

Danny Chun, spokesman for the Illinois Hospital Association, said the law is set up to keep tax-exempt hospitals accountable.

"We strongly believe hospitals provide much more in services and benefits to their communities than the value of the tax exemption," Chun said. "And that's the way the law is set up. You estimate what you think the tax liability would have been, and the hospital has to show it's doing more than that."

Chun pointed out that Illinois Supreme Court decisions dealing with whether hospital services qualify as charities for tax purposes have been "very, very muddy."

Prussing wants state legislators to revise the law to take into account communities that are affected the way Urbana will be, and she's hoping the Champaign County Board and perhaps the Champaign City Council will approve of resolutions she will propose urging lawmakers to do so.

She said she read the floor debate, and the law's effect on local communities was never mentioned.

"There's no discussion on what the impact would be on local governments, and certainly the impact would be severe in Urbana," Prussing said.

Further, Prussing said that what the state law qualifies as charitable is too broad and is in direct contradiction with court rulings. And she thinks that the health care they provide to low-income or uninsured patients is already subsidized by the prices other patients pay for regularly-priced procedures.

"This is just a reflection of a huge powerful lobby that told the Legislature that they were going to go broke," Prussing said.

Carle made $108 million in 2011, according to an annual report it files with the Illinois attorney general. It had $763 million in unrestricted cash reserves.

"There may be some hospitals that are on edge, but certainly Carle and Presence are not on the edge," Prussing said.

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Joe American wrote on May 21, 2013 at 10:05 am

Lickin' her chops over the prospect of spending someone elses money.  Mmmmm, can almost taste those dead presidents now!

ERE wrote on May 21, 2013 at 10:05 am
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Mayor Prussing is conveniently leaving out the converse-that for years Urbana has been receiving a disproportionate share of tax revenues from Carle.  

mankind wrote on May 22, 2013 at 4:05 pm

Which kind of makes sense, seeing as all Carle's property is within Urbana. If Urbana was getting tax revenues for all of Carle's property within the 25-county area, then you'd have a point.

ROB McCOLLEY wrote on May 25, 2013 at 6:05 am
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Convenient Care

At Convenient Care, our experienced medical staff sees both Carle and non-Carle patients without the need for an appointment.


  • Champaign on Curtis
  • Danville on Fairchild
  • Mattoon on Lerna
ROB McCOLLEY wrote on May 21, 2013 at 11:05 am
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I've always been impressed by Prussing's ability to chase businesses out of town; but I think she's met her match.

WOW wrote on May 21, 2013 at 12:05 pm

Yeah, after Carle, she should sue U of I for the lost property tax revenues because they are tax exempt also and are sitting on super valuable land. Everytime U of I uses eminent domain, they pull valuable property off the tax rolls, permanently.

Small businesses only wish they had a law like these Illinois health centers now do. By calling deadbeat customers "charity care", most small businesses "deadbeat customer" losses would easily exceed their property tax bills. Then they would pay no property tax as well.

That law was custom taylored for hospitals & clinics. You have to hand it to their lobbiests, they skillfully pulled a fast one.

Sid Saltfork wrote on May 21, 2013 at 1:05 pm

Gee... if Naomi's bill is allowed to come up for a vote by Mike Madigan, will she show up for the vote?  Her last vote regarding her district's public employees, and retirees pensions did not require her to show up because it was already decided before the vote according to her. 

Maybe; it is time for two, long time, local politicians to gracefully retire.  Otherwise, the voters may think that they are in it only for the money.

bluegrass wrote on May 21, 2013 at 2:05 pm

One would think the good people of Urbana, but most especially the Mayor, would be more than happy to pay their fair share of taxes to support the charity work of hospitals.  Talk about greedy!

Sid Saltfork wrote on May 21, 2013 at 3:05 pm

bluegrass;  This is one of those times when I agree with you.  Urbana was happy to take the money before the legislation change.  There was no mention of the magic 3% of Urbana's indigent receiving charity during those times.

cretis16 wrote on May 22, 2013 at 1:05 pm

Not to worry....think of all the tax money that will flow to Urbana after the walk along the drainage  ditch is completed., and all those businesses move in. Then add on the elegant Lincoln Hotel....with all rooms sold out. With these two projects, there should be more than enough money to make up for the Carle loss.

Sid Saltfork wrote on May 22, 2013 at 2:05 pm

I keep coming back to Mayor Prussing's magic 3% statement.  Urbana's residents are only 3% of the geographic area which Carle serves.  That is the total area regardless of the need for "charity".  Many of those living in the area served by Carle have never set foot in Carle.  If you look at Carle's statement; 22% of Carle's "charity services" went to Urbana residents, and 17.5% of the cost for overall "charity services" went to Urbana residents. 

I have to give credit to Mayor Prussing on her spinning out the magic 3% even though it is an apples to oranges exaggeration.  I hope she knew it was an exaggeration.

mankind wrote on May 22, 2013 at 4:05 pm

Hey, I have an economic impact on the area just like Carle. I buy groceries and other items at local stores, I pay people to fix my car and drywall my basement, I "fund" local charities... can I be exempt from property taxes, too?

Sid Saltfork wrote on May 22, 2013 at 4:05 pm

Only if you form a "public service" organization like the NRA, or the ACLU.  Otherwise; you are just like the rest of us, sheep to be shorn.

ROB McCOLLEY wrote on May 23, 2013 at 11:05 am
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Drywall in a basement?

Sid Saltfork wrote on May 23, 2013 at 2:05 pm

mankind must have had the good sense to not move into a floodplain area, or a community where the sewers backup like Urbana.  Unfortunately, most people do not research that information before investing in a house.  mankind evidently did his homework.

Danno wrote on May 22, 2013 at 6:05 pm

Urbana's est. 2011 population just under 42,000. Legal costs to pursue said matter: who knows; K.I.S.S.: to set the $832,000 amount straight, 'allow' each counted resident to simply send a $20 amount to Prussing...wait...their overhead cost would be, perhaps, 55% of that. Send it to Carle (the taxable side)...wait...I've no idea of their overhead...ugh...I should have become a Corporate Tax Attorney; lifetime employment...

Sid Saltfork wrote on May 22, 2013 at 8:05 pm

Yep; the estimated 2011 population was 41,518 with 3,192 of them being under an income of $10,000.  Who would have guessed that 7.69% of Urbana's population had an income of less than $10,000?  When the poverty line amount is used,  Urbana's poor population is much higher.  That explains the 22% of Urbana residents receiving "charity" services from Carle with the other 78% of people receiving "charity" services being from the rest of Champaign County, and the other 24 counties. 

Marti Wilkinson wrote on May 22, 2013 at 10:05 pm

I wonder how much money pursuing a lawsuit would end up costing Urbana? Plus, do consider that Jakobsson's spouse is on the city council. When one considers that Carles profits are generated from patients throughout Central Illinois, it really is stupid for Prussing to continue whining about the property tax exemption.

Wouldn't the council better serve it's residents in looking for new sources of revenue, or in looking at areas that can use cuts? People who live in the community do so because it has a different tone than Champaign, and they are willing to pay a higher property tax rate.


asparagus wrote on May 26, 2013 at 1:05 pm

I wonder if Carle provides as much value out of a dollar input as does the city of Urbana? Maybe Urbana should see if there aren't some city programs that could be funded through Carle's charity outreach to make up the lost revenues.