Township Assessor: New Elmhurst Hospital is Going On the Tax Rolls

But School District 205 officials expect hospital status will change on appeal, and they will have to give back about $1.4 million in tax revenue.

Determining how much to request in property taxes each year is never an exact science for any taxing body. But this year, a big wild card will come into play.

Hospitals all over Illinois are being evaluated to determine whether they will continue to receive . Elmhurst Memorial Healthcare is one of those providers. If the state determines EMHC provides enough charity care, it will continue to operate as a nonprofit and will not have to pay millions in property taxes to the city, park district, library and school district next year. If the state determines EMHC is a for-profit entity, it will have to pay up.

In addition to the , EMHC operates at a number of other properties in town.

Elmhurst Unit District 205 School Board Tuesday approved its tentative levy based on the assumption that it will receive about $1.4 million in property taxes from the hospital. The proposed tax levy is 4.7 percent higher than last year, which is largely due to that assumption.

"(The York Township) assessor specifically said they will be putting the hospital on the tax rolls this year," said District 205 Assistant Superintendent for Finance Chris Whelton. "They recommend we levy for it."

Under the Illinois Tax Cap, the district is allowed to levy the amount of the Consumer Price Index from the previous year, which is 1.5 percent, plus an amount for new growth.

"The most critical piece of the tax levy is trying to estimate new growth," Whelton said.

The township assessor told district officials to estimate $38 million in new growth from the hospital property, he said. Besides the hospital, any other new growth in town would be from new homes being built, but Whelton said that is probably only about $10 million for the year. To put that into perspective, Whelton said, back in 2007, new growth was nearly $81 million.

The 4.7 percent levy increase is more than the district expects to get once equalized assessed valuation (EAV) and new growth is determined, Whelton said.

"(The township assessor's office) is having a lot of trouble getting estimates to school districts," Whelton said. "It's a general reassessment year, plus declining (home values) have resulted in lots of appeals. They're way behind."

Township officials are indicating the decline in home values is about 8 percent this year, he said.

School District officials always levy high so as not to lose any potential tax revenue, he said. In 2010, for example, the district levied 5.66 more than the previous year based on a CPI of 2.7 percent. What they actually received was 3.51 percent, he said.

This year, "we're projecting it to be more like 3.7 percent," Whelton said.

But the real game changer will be if Elmhurst Memorial Hospital is successful in its bid for tax-exempt status. If that happens, the School District would have to give back any tax money the hospital pays the district. Therefore, while the district may collect $1.4 million from the hospital initially, it cannot plan to spend it.

"We do expect them to apply for tax-exempt status," Whelton said. "They are putting it on the tax rolls, (but) if some point down the line they achieve tax-exempt status, we would have to refund the money. We are concerned about that. We definitely should reserve those funds for that potential."

In fact, only three hospitals in Illinois have had their tax-exempt status overturned and been required to pay property taxes. Edward Hospital in Naperville is one of them, and it is vigorously fighting the ruling.

"The likelihood of Elmhurst Hospital actually entering the tax base of District 205 is very, very small," School Board member Jim Collins said.

By the Numbers

A flat revenue stream is just one of several financial challenges this year. State revenues are falling off—transportation is just one example—and now, thanks to a new state ruling, local districts must pay the salaries and other expenses associated with regional superintendents.

"Expenditures are outpacing revenues," Whelton said. "With a lot of uncertainty and variables with enrollment, different student needs in the district, it is fiscally responsible to levy for (maximum) new growth."

The district is levying in 2011 $87 million for its funds governed by the Illinois Tax Cap. These funds include education, operations, transportation, special education, retirement, social security and working cash. An additional $9 million will be levied in the bond and interest fund, which is not governed by the tax cap, for a grand total of $95.8 million.

Regardless of the levy amount, the district will only receive what the county determines it should receive, School Board President Susan DeRonne said.

"It is what it is," she said. "The only reason we levy more is so we don't lose out on what is coming to us."

Property tax revenue amounts to about 84 percent of all revenue received by the district.

The School District will hold a public hearing on the proposed tax levy Dec. 13.

Bill November 16, 2011 at 05:26 PM
Who does he this "we" is? The school's finance director seems to mistakenly think there is an "Us" and "Them" when it comes to taxes. It's "us" and "us" ... where "us" is the taxpayer. The taxpayers decide how much should go to the government - the gov't isn't entitled to "what is coming to us." Crazy.
NancyC November 16, 2011 at 06:47 PM
Okay Marilyn then expect to pay those taxes through every transaction you have with Elmhurst Hospital. Just like any Corporation/ Company/Business those costs are passed right on to the consumer in HIGHER PRICES. Where have I been last I heard we were trying to reduce Health care costs in this country! Did you know Blue Cross and Blue Shield of Illinois is not-for-profit, non-investor-owned which is a good thing. The funds that would go to undisciplined government bureaucrats to waste on their pet projects, are instead put right back into health care which is also good.
Mike Deering November 16, 2011 at 10:08 PM
I suppose that if they're taxed as any other for-profit entity, I don't see why hospitals will need to follow EMTALA laws and be mandated to treat every person entering the ER. Oh, and then they can eliminate money-losing services, too - like trauma center certification. The law of unintended consequences. But Nancy C. IS right. It's doctors, hospitals and pharma USAGE - or how much medicine we use - that's what drives healthcare costs and insurance rates.
Deke November 16, 2011 at 10:41 PM
Nancy C is correct. If the hospital is required to pay real estate taxes, that cost will be passed along to patients in the form of higher charges, which will result in increased costs to health insurers, who in turn will raise their premiums -- which will result in higher costs to employers, which will depress employment. It also will result in higher costs to individuals who contribute a certain percentage of their wages or salary toward health insurance premiums. To the extent the hospital cannot pass the increased costs along, that will result in less funds available for improvement/maintenance of facilities and equipment, etc., and decreased quality of health care. It may sound like a great idea to "tax that big hospital," but ultimately, we, the taxpayers, get stuck with the bill and pay the price for undisciplined state and local governments and taxing bodies.
Dan November 17, 2011 at 04:03 AM
I bet that 1.4 million the hospital may pay in property taxes is a drop in the bucket relative to the income stream the hospital has compared to what many Elmhurst residents pay compared to thier personal incomes. An individual earning say a 100,000 dollars with a 10,000 dollar property tax bill pays 10 percent of thier income in property taxes. Many Elmhurst residents dream of a 10,000 dollar property tax bill. What percentage is 1.4 million of what the hospital bills each year? Given the thousands of patient that all of facilities see the property tax would probably add less then 10 dollars to any given bill. Property taxes are to high not only for the hospital but also businesses and homeowners. Why not work to change how education is being funded in Elmhurst so everyone's property taxes can be reduced? At least a business or hospital has the ability to pass on the ever increasing property tax cost unlike a homeowner that has to just grin and bear it.


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