Urbana, IL -(Effingham Radio)- On February 5, 2020, Circuit Judge Randall B. Rosenbaum issued his decision in the long-running litigation regarding The Carle Foundation’s entitlement to property tax exemptions. The litigation between The Carle Foundation, Champaign County, the City of Urbana, Cunningham Township, and the Illinois Department of Revenue, arose out of local officials’ taxation, beginning in 2004, of hospital properties that had been exempt for decades. In 2012, a new state law clarified the requirements for property tax exemptions for not-for-profit hospitals. The new law did not terminate the litigation about Carle’s exemptions before that time. Today’s ruling awarded Carle exemptions for 2005-2011 and solidifies its continued entitlement to exemptions for 2020 and beyond.
A month-long bench trial before Judge Rosenbaum took place in 2019. In a 145-page decision released on Wednesday, Judge Rosenbaum ruled that The Carle Foundation had satisfied all legal requirements for exemption. He ordered a refund of $6.2 million to Carle, consisting of tax it paid on the exempt properties from 2005-2011. Most of the government entities responsible for the refund, including the City of Urbana, have set aside funds, pending the outcome of the case, to pay their respective shares.
“The court’s ruling is so important for the patients and the community that we serve. Tax exemptions play a vital role in enabling not-for-profit hospitals to maximize investments in new and innovative facilities, technology, and expertise required to provide the exceptional, leading-edge care that our patients expect and deserve,” said James C. Leonard, MD, president and chief executive officer, The Carle Foundation.
“Carle provides care to all who need it, regardless of their ability to pay. Tax exemptions free up resources that help provide free or discounted care. In 2018, for example, Carle Foundation Hospital provided more than $21 million in services to members of the community who need that assistance—the second highest total of any private hospital in Illinois, and far more than many larger hospitals.”
Carle leverages property tax savings by providing charity care and engaging in other charitable activities that cost more than four times the amount of tax that Carle would pay if its properties were not exempt.
“For more than 15 years Champaign County, the City of Urbana, and Cunningham Township have waged a battle against property tax exemptions for hospitals—exemptions that Illinois not-for-profit hospitals have received for more than a century. Today, Champaign County stands alone among the 102 counties in Illinois in disputing hospitals’ entitlement to exemptions,” said Laurence J. Fallon, executive vice president and chief legal officer, The Carle Foundation.
“Judge Rosenbaum’s ruling makes it clear that there is a good reason why hospital property tax exemptions are routine in the other 101 Illinois counties.”
“While today’s ruling requires Champaign County, Urbana, and Cunningham Township to refund all of the tax they collected, we remain hopeful that the governing bodies will consider settling to end this litigation as the Urbana School District and Park District did several years ago.”
