Carle tax trial, Day 12: Exemption applications focus of day's testimony

Carle tax trial, Day 12: Exemption applications focus of day's testimony

URBANA — Lawyers for the Carle Foundation are nearly ready to wrap up their side in the trial of an 11-year-old lawsuit Carle filed over the denial of its tax exemptions for its main hospital and three other properties in Urbana.

Carle's longtime general accounting manager, Gene Koch, is set to return for more questioning today, and Carle's final witness will follow — health care consultant Kevin Cornish.

Cornish is expected to provide a big-picture overview of Carle's ongoing battle with state and local taxing authorities compared to how other counties in Illinois have handled requests for property-tax exemptions from nonprofit hospitals.

Koch has prepared Carle's tax-exemption applications, and was questioned extensively Thursday about what information goes into the applications and who supplies it to him.

Exemption applications for the tax years at stake in the lawsuit, 2004-11, were prepared by Carle for the trial applying a change in state law in 2012 retroactively. Since 2012, hospitals have had to show they give out as much in charity in their communities as they would have to pay in taxes to be considered eligible for tax exemptions.

The total additional taxes Carle paid due to the loss of its tax exemptions from 2004 to 2011 was $21.1 million — of which $17.8 million was from the loss of exemptions on the four Urbana properties on which the lawsuit is focused, according to one of the documents on which Koch was questioned.

For some years prior to the April 1, 2010, acquisition of the former Carle Clinic by the Carle Foundation, only partial exemptions are sought because of spaces the foundation had leased to the clinic, he said. For 2011, a partial exemption request reflects space leased to Walgreens, he said.

At stake in the lawsuit for seven local taxing districts are refunds Carleis seeking, plus interest, on the taxes it paid under protest on the four Urbana properties.

Subtracted from the $17.8 million — if Carle prevails — would be the taxes Carle paid to two other taxing districts, the Urbana school and park districts. The school and park districts wouldn't be subject to refunds because they settled with Carle and aren't parties to the lawsuit.

Go figure

A few numbers of note about exempt and nonexempt hospitals, from the Illinois Health and Hospital Association:

156: Hospitals in the state (out of a total 209) that are nonprofit and property tax-exempt under statutory requirements.

24: Hospitals in Illinois that are exempt from property taxes because they're government-owned.

29: Investor-owned, for-profit hospitals in Illinois.