Property Taxes Rise, Urbana Mayor Blasts Hospital Tax Exemption

Property tax bills going out to Urbana residents include a 10 percent hike.

On Monday, Mayor Laurel Prussing unveiled the city’s proposed budget. Prussing said Urbana’s portion of property taxes will not go up, but she said the total amount will be higher because of pressure put on schools, the park district, and the county.

Prussing said the city needs to cover a million dollar budget gap, the result of what she called “the Carle Effect.” A state law exempts Carle Foundation Hospital from paying local property taxes because of its charity care.

“Carle serves a huge region of 25 counties in Illinois and Indiana," Prussing said. "Urbana is a small city. We’re three percent of the region’s population, but 83 percent of Carle’s property is in Urbana. So, that means that we are essentially paying for the charity care for 1.2 million people. So, this is an unsustainable situation.”

The city is challenging the constitutionality of the hospital charity care law, and Prussing says she expects a circuit court to rule on the case in June.

Meanwhile, Carle argues that its charity and discounted medical care far outweigh the money it would pay in taxes.