The Village of Oak Lawn is counting on a million dollar influx of money in its 2016 budget that could be helped by one court decision released last week and threatened by another one pending before the Illinois Supreme Court.
While Christ Advocate Hospital has not agreed to pay the Village of Oak Lawn the one million dollars that the village has already put in its budget, unrelated cases may make the payment unlikely and unnecessary. The idea of a “fair share payment” to the village from the hospital as a tax exempt charity is not new to Oak Lawn with the hospital previously paying $1.1 million over three years.
That payment obligation, which Mayor Sandra Bury continues to falsely claim is $3.2 million, ends at the end of 2016 and the hospital and village only began discussions about any future arrangement two weeks ago. Despite the lack of agreement, the village board approved a budget with revenue that includes a million dollar payment in 2017 from the hospital.
Last week, the First District Illinois Appellate Court unanimously held that the 2012 hospital property tax exemption statute is constitutional. The statute had set a new statutory test for charitable property tax exemption for hospitals. It is the third time that a court has found that the statute is constitutional.
However, on the other hand, the payment is threatened by a court case that was filed in Champaign County in 2014 that challenges the tax exemption to hospitals under the Illinois Property Tax Code. The downstate appellate court ruled that the same statute is unconstitutional and the hospitals have to pay taxes. That case is before the Illinois Supreme Court and Oral Arguments are scheduled for January 12th.
A decision on the case will not be produced until spring. If the Illinois Supreme Court rules that the tax exemption is constitutional, a fair tax payment from the hospital may make sense. However, if the court rules it is unconstitutional the hospital wouldn’t be likely to make another payment to the village.
The result may be that the village’s administration, in counting on a one time payment, may be left holding the bag until the Illinois Supreme Court makes a decision. In the meantime, the administration and the Advocate Christ Hospital officials can figure out if an increase from about $300,000 a year to $1,000,000 a year is even realistic.
The village’s budget may be counting on it because any shortfall will have to be made up with a cut in services or a tax hike.