Hospital Tax Exemptions Still In Place, As High Court Sends Carle Case Back To Circuit Court

The long-running legal fight between the Carle Foundation and Urbana and other local governments over hospital tax exemptions will last a little longer.

The Illinois Supreme Court ruled Thursday that an appellate court that ruled against current state law on the exemptions lacked the jurisdiction to do so. The high court sent the case back to circuit court. And for now at least, the 2012 state law defining how much charity work a hospital must provide to earn a tax exemption stays in place.

The Supreme Court ruling does not address the state law on hospital tax exemptions directly. Instead, the ruling looked to procedural rules on how the case should best be handled in court.

The full text of the Supreme Court’s ruling is available here.

Urbana Democratic mayoral candidate and alderwoman Diane Marlin said the ruling “was not the ruling that the city had been hoping for”. But she declined further comment until she could hear analysis from the city’s own attorneys before saying more.

Republican mayoral candidate Rex Bradfield and current Mayor Laurel Prussing, a Democrat, say they approve of the high court's decision to send the case back to circuit court, but for different reasons.

"(The courts) didn't render a decision on whether Carle was entitled to the tax relief," Bradfield said. "They went through all the other stuff, and they never issued a decision that simply said,'the tax code says that Carle is exempt, that's the controlling law, therefore Carle is exempt' and that's all they had to say."

Bradfield is favor of keeping the law in place, saying Carle does an appropriate amount of charity care to warrant the tax exemption.

"They (The Illinois Supreme Court) got to the fundamental issue, which is 'what is a charity?'" said Prussing. "They said 'why should we be messing with this particular law, and deciding the constitutilonality of it, if you haven't even asked the basic question at the local level, the circuit court level.'"

Prussing contends that Carle shouldn't be allowed to maintain its tax exempt status when it's the tenth most profitable hospital in the U.S., in a study cited by Forbes.