Supreme Court Punts On Non-Profit Hospital Taxes

Mar 23, 2017

The Illinois Supreme Court on Thursday decided not to answer a question about whether non-profit hospitals must pay property taxes. The case began with Carle Hospital in Urbana, but has implications across Illinois.

Both the hospital and local governments were hoping the court would get to the main question: Is it constitutional to exempt charity hospitals from paying property taxes?

But for procedural reasons, the Supreme Court declined to get into that, sending the case back to the trial court for more litigation.

“The essence of this is that the Supreme Court says the basic question that first needs to be answered is whether Carle Hospital is a charity,” says Laurel Prussing, the mayor of Urbana. Carle is based in the city and sued it along with Cunningham Township and Champaign County.

“I’m very happy to have that be the issue to be discussed, because Carle Hospital, in a study that was done by Johns Hopkins University last year, turns out to be the tenth most profitable hospital in the United States,” Prussing says.

Carle spokeswoman Laura Mabry says there were “significant omissions” in that research. She says in one recent year, Carle gave away more than $30 million in charity care.

An Appellate Court in Cook County resolved a similar case in favor of hospitals. But that decision is being reconsidered, and the issue could soon be back before the Supreme Court.