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DuPage endorses tax-exempt status for hospitals

Saying a decision to strip Naperville's Edward Hospital of its property tax exemption could jeopardize care for the county's uninsured and working poor, DuPage board members approved a resolution supporting tax-exempt status for all hospitals in the county.

It remains to be seen whether a growing list of declarations from local governmental entities is enough to help state lawmakers find a legislative compromise.

Edward officials say they believe grass-roots support for the tax exemption will send a strong message to Springfield. Naperville, Plainfield, Will County, Naperville Development Partnership and DuPage Community Clinic passed similar resolutions.

“The people who know us the best in our communities — like the municipalities, like the county government — are voicing their support for a tax exemption for hospitals because they have the closest view and broadest view of what we bring to the community,” said Brian Davis, Edward's vice president of marketing and government relations.

The debate started in August when the Illinois Department of Revenue ruled that Edward, Northwestern Memorial's Prentice Women's Hospital and downstate Decatur Memorial Hospital don't provide enough free or discounted treatment for the poor to qualify for tax exemptions.

That decision hasn't been enforced because Gov. Pat Quinn directed his staff to work with the hospital industry and others to find a legislative compromise. The governor wants recommendations on legislation by March 1.

In the meantime, Edward is continuing to appeal the Department of Revenue's ruling.

“We were pleased the governor intervened,” Davis said. “We believe there should be a broader view of the community benefit we provide.”

Officials say DuPage hospitals contributed $401.5 million in community benefit in 2009, including $242 million that wasn't reimbursed by Medicare and Medicaid. But Edward officials say the Department of Revenue is recognizing only direct charity care — an estimated $50 million to $70 million.

Property tax exemptions are reviewed when hospitals make land use changes. About 15 hospitals, including Adventist GlenOaks Hospital in Glendale Heights, are awaiting decisions on their tax-exempt status.

There is no state money involved in the property tax decisions, but local municipalities, parks and schools could benefit if the hospitals end up paying.

Hospitals, however, say losing their property tax exemption would force them to reduce services, lay off employees and cancel construction projects.

“If we are on the hook to pay taxes, we are going to have to limit services,” Davis said. “We're going to have to look at things in a totally different light.”

DuPage County Board Chairman Dan Cronin said Edward is “an integral part” of the health care safety net that helps the county's uninsured and working poor.

“Imposing new taxes at this time will only jeopardize their financial ability to continue serving this population and will ultimately shift the burden to taxpayers,” Cronin said. “I believe a compromise will be reached that satisfies all parties involved.”

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