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IL hospitals fight for tax breaks while state wrestles with rules

Chicago Tribune, October 18, 2011

When Illinois state Sen. Iris Martinez proposed that nonprofit hospitals should provide a minimum amount of charity healthcare in order to keep their tax-free status, she didn't win friends in the industry. Many hospital officials, she said, wouldn't discuss the idea, and once "I was told to my face (the bill) needs to go away." But with recent rulings by courts and the state that have forced some hospitals to start paying millions of dollars in property taxes, "now these hospitals are beginning to see we need to do something about this," said Martinez, a Chicago Democrat. For more than a century, nonprofit hospitals in Illinois generally have not had to pay property, income and sales taxes. In exchange, the hospitals individually grant millions of dollars in free or reduced-cost care to patients who qualify because they are poor or uninsured. Now, battle lines are being drawn between hospital officials who would like a blanket tax exemption and taxpayer and health advocates who say it's high time that medical facilities provide more charity care or pay their share of taxes.