Local hospitals ask Kane County for tax break
The value of the help local hospitals give to the community will go up against the value of property taxes hospitals could pay to Kane County taxing bodies in a new debate county board members will begin next month.
Elizabeth Lively of the Metropolitan Healthcare Council, a hospital association, lobbied county board members Tuesday night to side with local hospitals in a new fight to maintain tax-exempt status.
That status for all not-for-profit hospitals was put in jeopardy in August when the Illinois Department of Revenue said three hospitals — including Naperville's Edward — were not eligible for charity status because they provided less than 2 percent of their net patient income to free care.
That free care typically goes to the uninsured or underinsured, a population found in smaller numbers in more affluent areas.
On the surface, local hospitals coming onto the tax rolls would be financial windfalls for local taxing bodies, including schools and Kane County government. But Lively reminded county board members that local hospitals must find money to pay tax bills if their charity status vanishes — and that money would likely come from cutting services.
Lively said Kane County hospitals provide $73 million in free care for area residents. But that number doesn't include other costs the hospitals pick up to subsidize Medicare and Medicaid patients, or training for health care professionals. With nearly 6,000 employees, local hospitals represent the largest employers in the community, Lively said.
“This proposed change will undermine the safety net where all hospitals work together to ensure those who do not have insurance receive care,” Lively said. “The Illinois Department of Revenue only recognizes one category of charity. Does that mean that hospitals in this suburban area should pay property taxes where a hospital in another area with higher charity care should not?”
The question puts county board members in a tough position. Earlier this week, the county board's Legislative Committee unanimously voted against a state plan to extend tax breaks to Sears in Hoffman Estates because doing so would take away thousands of dollars of tax money from Carpentersville Unit District 300. Lively's question asks the county board to take a different view when it comes to local hospitals.
Kane County Board Chairman Karen McConnaughay indicated she supports ongoing tax-exempt status for not-for-profit hospitals. She noted Kane County hospitals play a large role in maintaining a healthy community. If that role is diminished, local taxpayers will ultimately shoulder a larger burden to subsidize health costs for their neighbors, McConnaughay said.
“You, as a public health body, are very committed to sharing the highest possibly quality of life for your residents,” McConnaughay said. “In order to reach that target it is entirely reliant on the strength of our working relationship with area hospitals. This is one of the key issues they need our support on.”
The DuPage and Will County boards have already voted to give their support to their area hospitals by passing resolutions opposed to hospitals losing their tax-exempt status. Kane County will formerly begin its debate with discussion by the county board's Legislative Committee next month.