Carthage hospital disputes charity vs. property tax

A two-year-old Illinois Supreme Court decision is creating financial troubles for one local hospital.

Memorial Hospital in Carthage is in a dispute with the Illinois Department of Revenue over an exemption in property taxes. It all comes down to the issue of charitable giving.

The Department of Revenue must determine whether Illinois hospitals qualify for property tax exemptions based on charitable contributions to the communities they serve. Currently, it's looking at an appeal from Carthage Memorial Hospital which received these exemptions until 2010.

"Because of the Provena Case, that was all put on hold by the Department of Revenue," Terry Pope, a board member of Memorial Hospital, said.

In 2010, an Illinois Supreme Court decision (Provena Covenant Medical Center vs. the Illinois Department of Revenue) more narrowly defined what constitutes a charitable contribution placing some hospitals, like Carthage, in a position where it would now have to pay property taxes.

To get an exemption, a charity would have to meet several criteria:

1 â?? has no capital, capital stock, or shareholders

2 â?? derives its funds mainly from private and public charity

3 â?? dispenses charity to all who need and apply

4 â?? does not provide gain or profit in a private sense to any person connected with it

5 â?? places no obstacles in way of those who need and would avail themselves of charity

This would not include health fairs and screenings or Medicaid and Medicare reimbursement, areas smaller hospitals like Carthage Memorial have considered charity.

"Because of that, we're being held back from having that exemption. That exemption cost us quite a bit," Pope said.

Pope said that amounts to more than $150,000 a year.

"Where you provide the charity care has become the issue. The Department of Revenue has said it needs to be in the hospital. We're saying, if we do it in the county, if we do it in conjunction with our health department and others that, that should count, because we are providing care at a cost, but not a cost to the public," Pope said.

The hospital appealed to the governor's office to delay a Department of Revenue decision. Pope believes there can be a legislative fix to the problem.

"That is money that could be used for staff or services that we don't have available, that we would have had, had we gotten the exemption," Pope said.

While the hospital awaits its fate, it's currently put a freeze on salaries and hiring. This comes at a time when the hospital like many others are already suffering from Medicaid and Medicare cuts.

Neither Governor Pat Quinn or the Department of Revenue have made a decision on Carthage's appeal.