The Fourth District Appellate Court has reversed a circuit court decision and bounced a property tax dispute between Logan County and the not-for-profit that formerly ran Lincoln College back to the lower court.
When Lincoln College went out of business several years ago, the Logan County assessor thought no teaching was happening so there should be no education-based property tax exemption for the 50-acre campus. It billed Lincoln College for property taxes in 2023.
The remnant institution said not so fast: The state legislature had granted a property tax exemption at the founding of the college 157 years before the dispute arose. That was in early 1865, when the college’s namesake, Abraham Lincoln, was in office and had not yet made that unfortunate trip to Ford’s Theater.
“All property, [of] whatever kind and description belonging or appertaining to the corporate body created by this act, shall be and forever remain free and exempt from taxation for any and all purposes whatever,” said the 1865 charter for the school.
The court noted the college had amended the charter several times but not that provision.
“The phrase in question refers to the purpose of the tax, not the purpose of the landowner’s use of its property,” wrote the appeals panel. “The Charter explicitly extends the exemption to the University’s property without any qualification as to the use to which the property is being put.”
Under the 1848 constitution the legislature gave out more than 80 tax exemptions of various sorts to newly chartered institutions, according to legal documents in the case.
That’s two state constitutions ago. The appeals court noted after a new state constitution went into effect in 1870, lawmakers could no longer issue that kind of blanket special exemption. Case law indicates there are still a few surviving institutions that have one. Prominent among them are Northwestern University with its gold coast Evanston campus fronting Lake Michigan, and Lake Forest University.
The assessor said the college still had to go through an administrative process to appeal its ruling. The college said no, the use-based exemptions in the tax code don’t apply at all. The college also asserted that the Illinois Department of Revenue never took any action to try to revoke the tax-exempt status, and didn’t tell the county assessor to do it, so the assessor doesn’t have the power to act on its own.
The appellate court justices agreed the revenue department never weighed in on the question. And the assessor never addressed the charter argument by Lincoln College. And they don’t have the power to decide a question about the charter anyway.
“If there is a question of whether the University has failed to meet its chartered purpose, statute provides the appropriate remedy. The Illinois Attorney General is authorized to pursue judicial dissolution of a not-for-profit corporation if it has exceeded its authority under law … Neither the local assessor nor IDOR has been granted such authority,” said the appeals court.
Lincoln College [University] has 21 properties, according to the Logan County Assessor. A Realtor listing has the campus itself for sale, priced at $4.9 million.
