A county tax review board asked Illinois to revoke the property tax exemption of the Carle Foundation, a not-for-profit health system, compelling it to pay $2 million in annual taxes.
Alleging that the foundation did not operate exclusively for charitable purposes, the Champaign County (Ill.) Board of Review recommended that the Illinois Department of Revenue deny tax-exempt status to five properties owned by the Urbana, Ill.-based foundation, which operates 242-bed Carle Foundation Hospital.
Last year the same board successfully persuaded the revenue department to revoke the property tax exemption of 189-bed Provena Covenant Medical Center, Urbana, Ill. The decision is on appeal before an administrative judge.
In its review of Carle, the board wrote: "It seems apparent that the mission is being narrowed rather than broadened." The board cited the relationship between the Carle Clinic Association, a for-profit physician group, the hospital and the Foundation, as a "central issue to be considered." The board said Carle refused to provide information the board requested and the "clinic and the hospital are separate entities only on paper. They are inextricably linked as mutually beneficial business entities."
The board accused Carle of discriminating against the uninsured, employing aggressive collection methods and devoting less than one-half of 1% of its revenue to charity care. The board concluded that Carle "does not meet the burden of demonstrating the parcels in question are in exempt ownership or in exempt use."
Board Chairman Stan Jenkins said, however, that Urbana is blessed to have two hospitals. "We have no ax to grind," Jenkins said. "We just don't think they meet the standards to qualify as being charitable."
Spokeswoman Gretchen Robbins said in a statement that Carle is awaiting the Provena outcome. "Revoking a hospital's not-for-profit status does not bode well for the health of our community," she said. "It risks hospitals' ability to provide no-cost and discounted care to those in need, as well as hospitals' ability to introduce new technology, to update their facilities, and in some cases-especially in rural communities-to keep their doors open."