Tuesday, March 12, 2013

Illinois Schools Face Pain from Hospital Tax Exemption Law

It appears that one of the (perhaps unanticipated?) effects of the new Illinois law on hospital tax exemption is additional pain for strapped school districts in areas where hospitals previously had been denied exemption based upon the Illinois Supreme Court's ruling in the Provena-Covenant case.  This story posted on the WLS Radio (Chicago) web site notes that some school districts will have to refund millions of dollars collected over the past several years: Valley View School District, which covers Romeoville and Bolingbrook, will have to refund Adventist Bolingbrook Hospital between $4.5 million to $5 million and Plainfiled School District 202 apparently owes Naperville's Edwards Hospital $1 million.


I have a simple solution for all this: end tax exemption for nonprofit hospitals completely.  Over the years, I've admittedly supported nonprofit hospitals receiving tax exemption under certain specific conditions: for example, if they could prove that they provided services unavailable from for-profit competitors or served populations that otherwise were underserved.  But my recent reading of Steven Brill's magnum opus in Time Magazine about hospital bills has pretty much pushed me over the edge and confirmed my view that hospitals are big businesses, not charities.  Tax-exemption for nonprofit hospitals is an idea whose time was centered in the volunteer organizations of the late 1800's and early 1900's run by religious orders; that time has long since passed.



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