State law on hospital exemption sends property taxes up in Urbana

State law on hospital exemption sends property taxes up in Urbana

URBANA — Memo to Urbana residents: better hold on to any state and federal income tax refunds. You're going to need them to pay your new property tax bill, or your rental costs.

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County property tax bills that will go out in the mail May 2 will reflect an average 10.43 percent increase for Urbana residents. Champaign residents will be paying about 3.84 percent more.

The owner of the typical Urbana home worth $100,000 with a $6,000 homestead exemption will pay about $298 more in property taxes this year than last, according to the Champaign County clerk's office. The owner of a $150,0000 home in Urbana with the same exemption will pay about $480 more.

The culprit is legislation approved by state lawmakers in May 2012 and signed by Gov. Pat Quinn that grants not-for-profit hospitals a property tax exemption up to the value of the charity health care the hospital provides. Urbana-based Carle Foundation said that in 2012 it provided $35 million in free or discounted health care to more than 25,500 patients.

In Urbana the new law means the loss of millions of dollars in taxable property and in tax income. That lost revenue has to be made up by the remaining taxpayers.

"I've been talking about this for a year. I had assumed that they'd be 11 percent higher," said Urbana Mayor Laurel Prussing.

The city council voted to lower its tax levy this year to make up for larger increases from the school and park districts, she noted. The city government will receive about $650,000 less in property tax revenue this year. But the school district's levy is up more than $2 million, or 6.55 percent, to $36.65 million, and the park district's property tax revenue increased 6.46 percent to $6.27 million.

"The city made a conscious decision that we keep our rate the same ($1.36 per $100 of assessed valuation)," she said.

The change means that Urbana's overall tax rate is now $10.46 per $100 of assessed valuation and Champaign's is $8.34 — a $2.12 gap. Last year Urbana's rate was $9.37 and Champaign's was $8.02. Just five years ago the gap between the two cities' tax rates was $1.02 — $8.34 in Urbana and $7.32 in Champaign.

The big tax increase and the disparity is worrisome to Prussing and other city officials.

"This could kill Urbana, and that's why we're fighting it," she said.

"People are looking at a big increase in their property tax bills," said Urbana City Council member Diane Marlin. "But the value of our homes hasn't changed. That's the thing."

Asked if she feared that more people would want to leave Urbana because of higher taxes, Prussing said, "I don't know. But I think they'd be making a mistake if they did."

Phillip Trautman, president of the Champaign County Association of Realtors, said the growing gap between Champaign and Urbana property tax rates "will make a difference" in home sales and home values, but noted that Urbana's taxes always have been higher than Champaign's.

"To be honest with you, Urbana and their taxes and the buyers who buy in Urbana, it really doesn't seem to faze them very much. Urbana always been right there at the top. People seem to accept it more than the typical market, which is unusual," he said. "I think it's always affected Urbana's market because they've never had the level of activity that Champaign has had."

Marlin, the city council member who also is a small-scale landlord, said about 63 percent of Urbana residents are renters who also will end up paying more. Landlords also will be hit, she said.

"This is a fixed expense and it's going to hit people who own rental property," she said. "The fact is that landlords have set their rents for next year and have signed leases so now they have this big tax bill but they're locked into rents for the coming year. Some landlords may have reserves but we have so many landlords who are kind of marginal, so what are they going to skimp on? It could be maintenance and fixing things. That bothers me."

Prussing contends that Urbana is bearing the brunt of Carle's charity care provision because more than 80 percent of Carle's property is in Urbana.

"We rank very highly in many things, but we shouldn't be burdened unduly with property taxes to give other people charity care," she said. "They serve 1.2 million people in 25 counties in two states, Illinois and Indiana. They got a huge change in the definition of what is charity and that means that 41,000 people (in Urbana) are paying for charity care for 1.2 million people. That's what it boils down to. That is really wrong.

"The assumption is that charity care and property taxes are linked, but they're not. There's a huge disconnect that a small a city could be stuck with a burden that is many, many times its population."

But Mike Billimack, Carle's vice president for marketing, strategic planning and government relations, said that of the $35 million in charity care provided, $5.6 million went to about 4,400 Urbana residents.

"That's roughly 10 percent of the Urbana population," he said.

Billimack also noted that Carle didn't have to pay any property taxes until about a dozen years ago.

"The local taxing bodies in 2002 denied the property tax exemptions which up to that point had always been granted," said he said. "So it wasn't that we always paid and now we don't. We never paid until 2002, and from 2002 to 2011 we paid under protest. And now we don't have to pay because we received those exemptions because of the 2012 law."

Urbana is fighting the 2012 law in court — Prussing said she believes it's unconstitutional — and in the Legislature. A bill, sponsored by Rep. Naomi Jaobsson, D-Urbana, says that a hospital's tax exemption couldn't disproportionately affect one community. The bill, introduced last May, remains stuck in the House rules committee.

Marlin contends the Legislature has to fix the results of the legislation.

"The solution has to come from the General Assembly. They're the ones who created this new definition of charity care. There's got to be a fix," she said.

But Billimack noted that when the legislation was being negotiated "there were a number of parties at the table, the hospital association, the attorney general, the governor's office, patent advocacy groups, the municipal league. They were all involved in those discussions and what came out of that was an agreement that everyone was comfortable with. It wasn't a win-win for every point of view, but it was a process of trying to come up with an agreement that everyone feels is appropriate and fair."

To undo the 2012 agreement, he said, "would require reopening that whole process."

Billimack said Carle has reached agreements with the Urbana school and park districts to "basically give them a five- to six-year glide path" to make up for lost revenue.

"We extended a similar offer to the city of Urbana many times and they have not been willing to come to the table," he said.

Although the loss of the Carle property has its biggest impact on Urbana, it will be felt countywide, according to the county clerk's office. Tax levies and tax rates are increasing for a number of districts including county government, Parkland College, the county forest preserve district, public health and mass transit. That's part of the reason taxes are higher in Champaign as well.

Urbana residents still don't have the highest property tax bills in the county. Their $10.46 per $100 of assessed valuation tax rate isn't as high as the $11.34 rate paid by some in Rantoul. The lowest in an incorporated area of the county is Bondville's $6.93 tax rate. The lowest in an unincorporated area is in Scott Township, on the central west edge of the county, with a $5.74 rate.

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787 wrote on April 20, 2014 at 9:04 am

And who passed this legislation?  Gee, that would be the same democrat party that Laurel is a member of, and the same democrat party that has run this state (into the ground) for years.

Skepticity wrote on April 21, 2014 at 8:04 pm

I found this part very interesting:


Billimack also noted that Carle didn't have to pay any property taxes until about a dozen years ago.

"The local taxing bodies in 2002 denied the property tax exemptions which up to that point had always been granted," said he said. "So it wasn't that we always paid and now we don't. We never paid until 2002, and from 2002 to 2011 we paid under protest. And now we don't have to pay because we received those exemptions because of the 2012 law."


So what is responsible for the tax increases?

Multiple government taxing bodies have continued to spend profligately despite the clearly imminent withdrawl of Carle from property tax roles.  They were not taxed prior to this century, and they are not taxed now. 

It has been clear that they were working to regain their exemption.  Why haven't the taxing bodies changed spending habits.  Why have these taxing bodies spent millions to build extravagant water recreation centers, rebuild downtown Urbana intersections, and confused and congested traffic with unnecessary bike path paintings when it was clear that Carle would be leaving the tax rolls?  Why the Boneyard project?

The SPENDING is the issue.  STOP the SPENDING!

We would all love living in a small town utopia with all the benefits of advanced urban planning. We do not have the business tax base to support that style of urban living. 

GeneralLeePeeved wrote on April 21, 2014 at 8:04 am

Hey, Laurel.......if you don't think it's fair that Urbana should have to absorb the entire impact associated with Carle's tax status, why did you think it was OK for Urbana to keep and spend all of the property tax revenues it used to get from Carle?  You now want to share the misery, but not once did you ever share the windfall.   

Barb.Yats wrote on April 21, 2014 at 9:04 am

They should only be allowed to write off the negotiated rate they accept for Medicare or Medicaid patients.  The reason hospital charge so much for services, is so they can write off the amount of money they don't collect.  For example, how many $1,200 bills have you gotten where the negotiated or payment rate was $30?  If they were only allowed to give away the negotiated Medicare/Medicaid rate as a tax write off, either the city would end up collecting a lot more revenue and they would have t show their massive profit, or more patients would end up getting services.  The amount they get to write off is ridiculous, Carle used to be the state of the art place to get care, now it's only state of the art to all the foreign trained doctors who are the bottom 10% of their class and accept employment at Carle.  Carle has a poor reputation with employees for feeling valued, Carle regularly reminds employees they lack options to seek employment elsewhere because they have become so huge.  Again, take away point it.... they should only be allow to write off a a federal rate for fair payment or the rate they accept for Medicare, not just numbers they want to make up!

Barb.Yats wrote on April 21, 2014 at 2:04 pm

1) I am not "white" nor did I say they should hire white American born men. You can look at the profiles of where many of these doctors are from. They come to the area to "practice" medicine on the Guinea pigs of Champaign then send their money back odd to their countries and families, they are not from here and do not care about the people of the area, they are essentially learning and making money.

2) I am saying that the amount the hospital should be able to write off should be a standardized rate for all hospitals seeking tax exemption status by giving away services. They should base the amount they are allowed to write off based on the amount they would get reimbursed for the services through a federally subsidized program like Medicare. For example, if an general check up is billed at $600 and Medicare only reimburses them $80, Carle should only be able to write off $80, but $600. This is why prices are so inflated for services so they can write off huge amounts and avoid taxes, while really only losing about $60 for someone's time.

3) The increased use of physician assistants and nurse practitioners allows Carle to bill under physician fee schedules and provide patients lower quality care by using a less than skilled monkey. A physician assistant had 2 years of education and can work at convenient care or assist with surgery, yet bill like a doctor and write off charges like a doctor. It's really a fleecing of our society in order to line pockets while sheep herding the people of this area through a less than desirable health care system.

annejasons wrote on April 22, 2014 at 7:04 pm

I couldn't care less about Carle so I don't know about their doctors but I like the rate idea!

Trailmom wrote on April 21, 2014 at 11:04 am

 Why should Carle only write off Medicare/Medicaid when they also offer Charity care to people who cannot pay their bills?  That is designed for qualifying patients and recently was expanded to patients in the outpatient clinics.

As for hiring foreign born doctors, first that is your assumption that they are foreign born. Some are actually born here but have a name that is foreign to you.  Plus, who is in medical school these days?  Sorry, but white, American born male doctors are not in the majority in med schools these days.

And BTW, MANY employees (including me) feel very appreciated and valued and glad to be working at Carle.

Sancho Panza wrote on April 21, 2014 at 12:04 pm

$2.12 (difference in Urbana and Champaign tax rates) / $8.34 (Champaign tax rate)=25%

Since this includes the county government, community college, MTD, etc., the difference in Urbana specific spending is even greater than 25% per assessed value. This is why my city (Urbana) provides me with 25% better streets, schools, libraries, parks, fire protection, police protection, etc.  :)

annejasons wrote on April 22, 2014 at 7:04 pm

I really hope you are trying to be sarcastic! which streets are you talking about? Cunningham rd has huge pot holes on the both sides , so does vine street right after schnucks and don't even get me started on Windsor.

The truth is that the high taxes are not justifiable!

chief21 wrote on April 21, 2014 at 2:04 pm

Look at the size of tax increases these urbana taxing bodies demand. Park District alone was 16% on top of that over the top rate increase. Everyone from the schools to parks in Urbana grabs 5-8 times the rate of inflation. All the public employees cheer because bigger budgets mean bigger salary increases for public employees. No wonder Illinois is only second to New Jersey in people leaving a state. There's too many 150K+ incomes in Urbana...and this tax increase only means instead of going to France this summer, they will have to settle for Hawaii. Stop The Spending!!!

annejasons wrote on April 22, 2014 at 7:04 pm

I'm a public employee and trust me, it doesn't mean bigger salaries for the common folk.

Son of a Barrelmaker wrote on April 21, 2014 at 4:04 pm

The County, Park District, School District and Township cannot annually increase the total amount of property taxes they collect by more than the rate of inflation.  They may ask for the sun but they won't get it due to tax caps.  Their tax rate; however, fluctuates based on the value of property in the district - values go down (like when Carle comes off the assessment rolls) and rates go up.  Values go up and rates go down.  Quit making wildly inaccurate assertions about property taxes and take some time to actually learn how the system works.

chief21 wrote on April 21, 2014 at 5:04 pm

From News-Gazette, "Notice of Propsed Property Tax Increase, Urbana School District #116, Champaign County Illinois"

"...The estimated total property taxes to be levied for 2013 are $ 36,185,296. This represents an 8.64% increase over the previous year."

Inflation rate? My property taxes seem a bit higher than the rate of inflation?

Urbana Parent wrote on April 22, 2014 at 10:04 pm

First of all, 

The Boneyard Project is a GRANT from the Federal government to spur economic developement in downtown areas of cities, not a dime of tax money is used in this project. This has been documented multiple times. If Urbana didn't accept the grant, it would of been used in another city.


Cunningham Avenue is actually state highway 45, the city has no responsibility in the plowing or maintenance of the road. 

Bike paths are things the voting population of Urbana want and use...if you don't like whats going on in the city...get something instead of crying behind the keys of this message board.

bluegrass wrote on April 25, 2014 at 10:04 pm

Not to be a stickler, but if the Boneyard Project is a "GRANT" from the federal government, it may not be locally collected tax money, but it is still tax money.  Many, many dimes of tax money, is it not?



Skepticity wrote on April 23, 2014 at 8:04 am

I am very interested that you say it is well documented that a grant is paying for the Boneyard improvements.  All I find are references to loans, and bonds to be payed off with TIF2 funds.  Nothing that shows that a Federal or State grant is paying for the all the project. 

Please provide a link that shows that the Boneyard improvents in Urbana are fully funded by a grant, and costing nothing for Urbana tax payers. 


Also, the bike paths that restricted traffic and created dangerous traffic patterns via a "road diet" and bikes sharing the busy streets with vehicles, including high traffic intersections, were NOT supported by by the majority of voters.  A group of bicycle activists pushed this through by packing the house with avid cycling enthusiasts.

Voters just want a town that accepts bicycle traffic in a safe way. 


By the way, I support bicycle friendly traffic patterns being designated NOT on main thoroughfares, but on parallel routes with less traffic.  Over the years I used designated bicycle route streets at times to go to work, and at times to ride about town with my kids on their bikes.  "Periodically" because most years much of winter is not suitable or safe for cycling due to snow and ice. 

I do not support "road diets" that concentrate heavy traffic from two lanes to one, causing more road wear, higher traffic congestion, and increased risk of collisions.  I do not think that having bicycle lanes cross motorized vehicle lanes at busy exchanges that involve turning cars, buses, and trucks is in the best interest of cyclists or motorists.

Sid Saltfork wrote on April 23, 2014 at 8:04 am

Bottom line is to not buy property in Urbana.  Drive around it.  Shop on it's fringes.  When the grants dry up; Urbana will have to pay for it's own follies, and whims. 

Other communities have to live within their means.  Let it be the same for Urbana.  The middle class flight from Urbana except for the academics started years ago.  Let Urbana dry up; but don't allow it to suck up the revenues of other surrounding communities, and the county.   

Son of a Barrelmaker wrote on April 23, 2014 at 3:04 pm

Chief21 they can ask for 8.64% but they won't get it.  Under tax caps they can only get an increase in their total taxes equal to the CPI, plus an allowance for new construction and annexations.  Research it yourself at the County Clerk's Office like I did.

cretis16 wrote on April 24, 2014 at 8:04 am

Just another day of spending in Urbana. I looked at a few stops we have made along the way and compared the property taxes:

Austin Texas: Property Value $234, tax $ 1,823 ( no income tax too)

Knoxville, Tenn. Property Value $178,000 property tax $ 1,343

Aiken , S.C. Property Value $ 177,000 property tax $ 1,222.

Urbana, Il. Property Value $ 173,000 property tax $4,000++   WOW!!!

When we moved to Illinois I noted how accepting folks were on these outrageous property taxes, clearly one of the highest in the nation. Even with the high property taxes, the spending keeps increasing with no end in sight. I wonder if a balanced budget would even get 50 votes? It's a State of Illinois Problem and an Urbana problem.


BlahBlahBlah2013 wrote on April 24, 2014 at 3:04 pm

Carle couldn't be happier about this shifting of focus from the real issue. The real issue being Carle Hospital avoiding its responsibility to contribute to the communities in which it operates. And I'm not talking about the so called "charity" Carle claims to provide, which we all know is a term used very loosely by the Carle organization. Yes, Urbana, Champaign, and every other taxing body probably wastes money. That said, don't get distracted by this argument. The focus should be on the fact that yet another corporation is using its financial power to buy political influence. This law was very likely written and then sold by lobbyists supported and paid for by hospitals, including Carle. They were successful and now the homeowners not just in Urbana but in Champaign and other areas will have to pick up the tab. Thanks Carle. I would have thought the price gouging Carle implemented (aka double billing) would have been enough but apparently the leaders are a greedy bunch. Carle is no longer in the business of health care. That has become secondary to making money at all costs. Even if it means being a poor corporate citizen. Not likely to change though so, get used to it Central Illinois.


Haake wrote on April 25, 2014 at 9:04 am

This is interesting timing for my family. Our goal for the last few months, after waiting for the housing market to bounce back a bit, was to leave Urbana. We actually are quite fond of Urbana.

Our main issue is Urbana's public schools. I believe the staff to be generally very good however the administration is, well crap. Binding the hands of staff. 

My main issue with property taxes had been that I'm paying quite a bit for a very poorly run and financed school system. 

We sold our home just days before the rate increase. Lucky I guess. 

There is another comment I read here mentioning a middle class exodus from Urbana. I believe this to be true. I know of other neighbors frustrated with the school system, in this case at the elementary level, who already have left or are leaving.

It's fundamental to the future of our children as we as our community.

We'll be very close to the east here. Close enough to enjoy what Urbana has to offer, avoiding the taxes and schools however.

Sid Saltfork wrote on April 25, 2014 at 1:04 pm

Congrats on your move.  The villages in the county welcome new middle class residents.  Taxes are lower.  Schools are better.  Crime is significantly less.  Homes are less expensive.  People actually say hello to strangers, and help their neighbors. The down side is the commute during the winter.  You made a good decision in moving east.  The sun is at your back going to work, and driving home.  Enjoy the local festivals this summer also.

You will find that your input on village government decisions has more weight than in Urbana also.  Of course; there will be less statues, bike paths, and historic hotels.  Villages seldom receive grants for whims, and follies.  They use any obtainable grants for roads, and village needs.  

CaliforniaStreet wrote on May 08, 2014 at 10:05 am

I disagree with the notion that Carle's tax exemption is the main issue.  Nobody thought the Carle thing was a surprise.  Urbana kept spending knowing they could use the Carle issue as a scapegoat.

As an Urbana Resident, I guess I wouldn't mind the high taxes if I thought I was getting my money's worth, services wise.   I feel while Champaign schools seem to be steadily improving, Urbana's are falling apart.   The parks are nice, but did we really need that huge water slide at Crystal Lake?     The Urbana Police don't seem particularly responsive or helpful- they just sit on that speed trap on Lincoln Ave issuing tickets for those of us going to work- gouging us $75 at a time.  (I would like to say that I have absolutely no problem with the Urbana Free Library.) 

Unfortunately, this last election, there was no reasonable challenger for mayor.  Hopefully next election we can have a real choice.