Illinois high court affirms tax break for 157 nonprofit hospitals

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In recent Illinois healthcare news, a property tax exemption benefiting the state’s 157 nonprofit hospitals was recently affirmed by the Illinois Supreme Court.

At a high level, Illinois non-profit hospitals won’t have to pay property taxes. This includes some of Chicago’s most prominent, nonprofit healthcare centers such as Northwestern Memorial Hospital and University of Chicago Medical Center are now allowed to offset expenditures deemed charitable against their property tax liability.

To benefit from exemptions, hospitals will be required to bring proof they can provide at least as much charitable assistance in a given year as the property-tax bills they would have to pay. Tax exemptions represent savings of millions of dollars each year. A 2009 report by the Center for Tax and Budget Accountability estimated the property tax exemptions of 47 Chicago-area nonprofit hospitals were worth a total of $279 million annually.

Charitable services include, among other things, health services to low-income and underinsured individuals, the courts explained in a 14-page ruling.

Reactions poured in from hospitals associations across the state. “Hospitals across Illinois are at the forefront of an unprecedented transformation in healthcare,” said  A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association. Wilhelmi explained hospitals could use the money for cutting-edge medical equipment, or to hire much needed staff.

Critics of the law say many not-for-profit hospitals operate like a business and should contribute to their communities. “Why should the most profitable companies in the state be shifting their burden onto every other business and homeowner?” asked Urbana Mayor Laurel Prussing.

The recent ruling might cause some unease among Illinois taxpayers, who just learned that they are on the hook for $4,000, in retired teacher health care costs. However, for low-income patients, this is great news. Illinois has also taken a string of measures to expand access to mental health services and offer more affordable health insurance.

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