Kane County looks ready to support tax breaks for hospitals

Kane County hospitals hoping to maintain their tax-exempt status will likely receive the support of county board members who believe a property tax smorgasbord isn't worth huge medical cost increases for local residents.

State officials placed the tax-exempt status for nonprofit hospitals in jeopardy last August when the Illinois Department of Revenue revoked the charity designation of three hospitals that devoted less than 2 percent of their net patient income to free health care for people in need.

Charity care can be less prevalent in more affluent areas, but the Metropolitan Chicago Healthcare Council has estimated Kane County's nonprofit hospitals provide $73 million of free health care to area residents every year. Delnor Hospital in Geneva, Provena Mercy Medical Center and Rush-Copley in Aurora, and Provena St. Joseph and Sherman hospitals in Elgin were the hospitals the council used to come up with its numbers. The council is a hospital association that's lobbied board members to support the tax breaks. The council is also a campaign contributor to Kane County Board Chairman Karen McConnaughay.

McConnaughay said Wednesday tax breaks for hospitals that don't provide much charity care is a legitimate concern, but other hospitals, such as Stroger Hospital in Cook County, provide lots of charity care for people who don't even live in their intended service areas. She said counties must have a partnership with their local hospitals to ensure the health needs of local residents are met. Meeting those needs takes money, which may dwindle if hospitals use money currently spent on charity care to pay large property tax bills instead.

“There needs to be a solution, but the solution isn't taking away their (tax-exempt) status,” McConnaughay said.

Gov. Pat Quinn has called for a new task force to study the benefits of letting tax breaks for hospitals stand versus an immediate property tax windfall for the state, local schools and other taxing bodies, including Kane County.

Kane County Board member Jesse Vazquez is chairman of the board's committee that would author the letter of support for local hospitals. That same committee wrote a letter to state lawmakers in November calling for an end to tax breaks for Sears Holding Corp. Sears' tax incentives to stay in Illinois robbed Community Unit District 300 of needed property tax revenue, the committee reasoned at the time. Vazquez said there's a much larger community benefit to the health care local hospitals provide than the goods and services Sears provides.

“If people stop buying from Sears, you and I can't do anything about that,” Vazquez said. “But the hospitals provide services our residents need. It's also going to cost taxpayers a lot more in insurance premiums in the long run if the health of our residents suffers. Our hospitals are one of the largest employers in the area with good-paying jobs. I would question the amount Sears pays to their lower-level employees.”

The full county board will vote on the proposal next Tuesday.