SPRINGFIELD - As details roll out about legislation that swept through the Illinois General Assembly in the session's waning hours, Illinois taxpayers are learning more why the Illinois Hospital Association lobbyists didn't balk in committee about being required to provide free hospital care for the state's most indigent. The newly required charity donation in SB 2194 was a trade off for hospitals to continue to be exempted from paying local property taxes. The State Journal-Register explains part of the tradeoff:
The legislation — contained in Senate Bill 2194 — creates a new process for Illinois hospitals to qualify for exemptions. There’s an annual requirement that each not-for-profit hospital estimate the dollar value of its property tax exemption and then document to county tax officials how various services the hospital provides equals or exceeds the exemption amount.
Services that qualify include free or reduced-price care provided through a hospital’s charity-care program. The list also includes the difference between what it costs a hospital to treat Medicaid patients and what the hospital is paid by Medicaid.
Also included are financial or in-kind subsidies to other state or local government health-care programs and disease-management and prevention services for low-income residents.
Hospitals ran ads in 32 media outlets starting in early May, protesting legislation requiring them to pay taxes that would have cost them $321 million annualy. Another bill in the Medicaid reform package cuts Medicaid reimbursement for hospitals 3-5 percent, costing hospitals an estimated $120 million. Still, IHA lobbyists contended, lower reimbursements is better than paying three times more in local property taxes.
When asked about the tradeoff in Senate Exec committee, the Illinois Hospital Association lobbyist said that the required increase in charity donations would be set off by higher costs to privately insured patients. "That's the way it's been in the past, is now and will be in the future," he answered when asked by State Senator Dale Righter (R-Mattoon).
SB 2194 not only required hospital charity care to ward off any further Supreme Court action that could have set into motion hospitals paying property taxes, it also included a $1 per pack cigarette tax. Lawmakers in both chambers and on both sides of the aisle voted against their caucus majorities - with Republicans straying to vote Yes and Democrats jumping ship to vote No.
In the Illinois House, 18 Republicans (in red below) voted for SB 2194 cigarette tax and hospital deal, while 16 Democrats (in blue below) voted against the tax hike and the hospital exemption plan.
In the Senate, the Republican caucus voted as a bloc against the cigarette tax increase in SB 2194, but four Democrats (in blue) in contended district campaigns were allowed to vote "No." SB 2194 passed the Senate in a 31 to 28 vote.
Anti-tax hike groups are not pleased with lawmakers who promised to vote No on any tax hikes. Illinois Policy Institute and Americans for Tax Reform have issued statements condemning those that voted for SB 2194.
Governor Quinn has been quoted as saying he will sign SB 2194 into law.