Edward Hospital's attempts to reclaim taxes owed to them as a result of a 2012 change in state law are not going over well with some school board members.
According to DuPage County Treasurer Gwen Henry, Naperville Unit District 203 owes Edward Hospital $2,234,107.90 as a result of a new law that allows nonprofit hospitals to be exempt from local property taxes if they can show that they have done charitable work equal to or more than the property taxes they would otherwise owe. The changes also allow hospitals to claim property tax refunds for the three years prior to the law's passage.
"We've expressed (to Edward officials) this refund will have a significant impact on our school district and the Naperville taxpayers," said Superintendent Dan Bridges. "The requirement to refund money to Edward would suggest or imply the school district received money it was not entitled to receive, and that is not correct. The school district is entitled to receive its full levy. As a district, we depend on the county to determine how that amount is levied.
"In future years, as a result of the hospital's tax-exempt status, those taxes will come at the expense of other District 203 taxpayers."
Edward Vice President of Marketing and Government Relations Brian Davis, contacted after Monday night's meeting, said the hospital has routinely paid property tax on all of its parcels with the understanding that money would be refunded if and when the exemption were to be approved.
"We've notified our taxing bodies every year, by certified mail, that we were seeking tax exemption," Davis said. "Now, we're working with the district for the past month to discuss a payment plan. We've talked with talked them about different variations but ultimately we have to work with the county treasurer to determine how the refund should be paid back."
Board member Susan Crotty asked whether the district could make the payments "under protest," while board member Mike Jaensch was more emphatic.
"This is taxpayer money that is going to what is a well-run but also profitable institution. I found it interesting while doing research that the amount we're being asked to give them barely covers the salary of their CEO for one year. I don't know that's the way taxpayers of Dist. 203 expect their money to be spent," Jaensch said. "It is a big chunk of money and I'm very disappointed that someone we have such a close relationship with would basically, for lack of a better word, take money from our kids. The only way we can get it back is to raise taxes in the future, above what we would normally do."
Davis called the comments "unfortunate" and said he believes the community will understand the "legal process" in which the hospital is reclaiming what is owed to it.
"The people have a pretty good understanding that Edward has served families and children of this community for many years and will continue to do so for years to come," Davis said. "The bottom line is that we paid the property tax on parcels with the understanding we would be refunded provided the exemptions were approved and they were.
"We've enjoyed a good relationship with the school district for many years and partnered on many issues and we expect to continue to do so in the future."
The school district's debt is by far the largest, given it is the largest recipient of tax dollars. But other local taxing bodies who will be repaying the hospital include the city of Naperville, Naperville Township, the Naperville Park District, the Naperville Library, DuPage County, the DuPage County Forest Preserve District, and the College of DuPage.
Davis said the hospital has already been working with Will County municipalities to secure payment but talks in DuPage County have just recently started because the county tax bills were recently mailed out.
In other business, the school board swore in new members Kristin Kitzgerald and Donna Wandke and returning members Sudan Crotty and Jackie Romberg. They also elected Romberg as board president and Terry Fielden as vice president.