Tax implications of UI-Carle venture a concern in Urbana
URBANA — Reeling from higher property taxes, Urbana residents and their mayor have questions about the possible tax implications of a joint Carle-University of Illinois medical enterprise.
The proposal being floated by consultants hired by the UI and Carle is for a new college of medicine to replace the current medical school at Urbana, which is now a regional campus of the UI's College of Medicine in Chicago. It would be independently accredited and overseen by a private, possibly not-for-profit 501(c)(3) established jointly by the UI and Carle. Long-range plans envision a new $100 million building where physicians, students and UI scientists would collaborate on medical education and research projects.
Urbana Mayor Laurel Prussing said she was informed of the discussions that had been going on between the UI, Carle and other members of the business community, but did not participate in those early talks.
"I think it's a fantastic idea, but I don't want to see hospitals get tax-exempt status as a result of this, as a result of being a teaching hospital," she said.
Urbana residents have been especially hit hard by a 2012 state law that grants not-for-profit hospitals a property tax exemption up to the value of the charity health care the hospital provides. That has translated to a loss of millions of dollars in revenue, which is being made up by the remaining taxpayers. Prussing said she is fighting this impact two ways: by counter-suing Carle in court and talking with state legislators about changing the law.
In the meantime, residents like Susan Roughton are wondering how middle- and lower-income residents will survive the increase in their property taxes.
Roughton lives in west Urbana with her husband and two children. She's lived in the community for 19 years and her husband has for his entire life. With property taxes up an estimated 11 percent, she's concerned they may not be able to stay in their house.
"I'm not against (the medical school proposal) or anything. I'm all for growth and development and bringing exciting innovation to our community ... but it shouldn't draw additional resources," Roughton said.
Urbana residents support progress, and it makes sense for the campus to reinvent itself, said Andrew Scheinman, a patent attorney who divides his time between Urbana and Rochester.
But they're also for "vigorous inclusion" and open debates about proposals that affect the public, he said. Scheinman has accused UI and Carle officials of holding their discussions behind closed doors and he recently sent a letter to Chancellor Phyllis Wise, calling on her to hold a town hall-style meeting about the project.
"What Carle does or does not do has a huge effect on Urbana," he said.
Stephanie Beever, senior vice president for Carle Health System, turned aside questions about tax exemptions, saying the proposal is still in its early stages.
Although consultants from Tripp Umbach proposed adding a medical facility in later years, it's not clear that would even be needed, Beever noted. Carle has biomedical research space on the third floor of the Mills Breast Cancer Institute, where it already collaborates with UI researchers, as well as space in the new tower completed last year.
"This is really about people interacting with each other," she said.
Beever and others also said a high-quality medical enterprise would attract top health specialists and researchers, improving medical care and overall quality of life in Champaign-Urbana.
Consultants said the current model, in which the Urbana campus is part of the UIC College of Medicine, supports 215 jobs in the region. Under the model recommended, for an engineering-focused UI-Carle entity, the employment impact could reach 5,600 jobs by 2035 when the program is at "full maturity," according to consultants.
They also projected a $1.4 billion economic impact by 2035 and envisioned an "I-74 Medical Innovation Corridor," in which hospitals and clinics from Peoria to Bloomington to Danville collaborate in various opportunities.
Among the business community, "I think there's broad expectation that it'll be good for the economy," said Craig Rost, the new executive director of the Champaign County Economic Development Corporation. Rost was a longtime development official with the city of Champaign before joining the development corporation.
"Those of us charged with economic development are excited about the possibility of medical-related growth here. It's a potentially very good economic cluster," Rost said.
In Rost's point of view, the blending of engineering, computing and medical expertise "seems like a good fit with high potential for growth here."
In addition to adding employees and bringing in more federal research dollars to the new medical school, there is potential for growth of "affiliated companies," like medical supply companies and insurance companies, office buildings, he said.
"We're all for medical research" and the proposal for an engineering-based medical school could be an economic driver for the region, Prussing said.
"But we can't afford to say they're so wonderful they don't have to pay their taxes," she said.