Illinois Supreme Court Sends Carle Tax Case Back to Circuit Court

The Illinois Supreme Court ruled today (March 23, 2017) that a property tax exemption lawsuit filed by Carle Hospital in 2007 should be sent back to Champaign County Circuit Court to determine if Carle is a charity.

The ruling by the Illinois Supreme Court was that the case was not ready for appeal. The high court thus vacated a 4th District Appellate Court decision that declared a 2012 state law unconstitutional.

The state law had allowed not-for-profit hospitals, including Carle Hospital, to qualify for property tax exemptions if certain unreimbursed expenses and services exceed their property tax bill, even if they did not qualify as a charity generally.

Urbana Mayor Laurel Prussing said she had hoped the Illinois Supreme Court would decide the issue. She said the main questions of the Carle case still need to be answered.

“It’s a good thing that they’re sending it back to the circuit court to decide the fundamental question of whether Carle Hospital is a charity,” Prussing said. “The tenth-most profitable hospital in the U.S. probably doesn’t need a tax break. When one entity doesn’t pay property taxes, it shifts the burden onto everyone else.”

The Urbana City Council will discuss the case in closed session at 6 p.m. Monday.

Fred Grosser, the Champaign attorney who represents Urbana and Cunningham Township, said the ruling puts the case back to where it was before the appeal began a few years ago.

“We need to finish discovery and have a trial,” he said.

The state Supreme Court’s decision declined to address the case on its merits, although acknowledging it had authority to do so. Deciding constitutional issues now, before a trial court has ruled on whether Carle qualifies as a charity under the Illinois constitution or under the hospital taxation law, would be an example of “piecemeal litigation,” the decision stated.

“… This court’s long-standing rule is that ‘cases should be decided on non-constitutional grounds whenever possible, reaching constitutional issues only as a last resort,’” the decision stated.

Carle filed a lawsuit back in 2007 against various Cunningham Township, Champaign County and state officials, and later it added the city, township, Urbana School District and Urbana Park District as additional defendants. The suit involves the property tax years 2004 through 2011, with Carle seeking a refund of taxes it paid during those years. Carle was paid about $7 million by the school district and park district to be dropped from the lawsuit.

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Created on: Thursday, March 23, 2017 - 16:08
- Author: MikeM