The possible revocation of property tax-exempt status would be a "credit negative" for Illinois non-profit hospitals, according to a Moody's Investors Service report.
Over the summer, the Illinois Department of Revenue announced it would revoke the tax-exempt status of Northwestern Memorial's Prentice Women's Hospital in Chicago, Edward Hospital in Naperville and Decatur (Ill.) Memorial Hospital based on their levels of charity care. Illinois Gov. Pat Quinn has temporarily stopped the change until the legislature can define adequate levels of charity care.
Moody's Associate Analyst Carrie Sheffield, the author of the report, said if non-profit hospitals in Illinois lost their property tax-exempt status, it would strain the sector even more because "it places additional financial constraints on not-for-profit hospitals, requiring more expense reductions and process redesign."
Additionally, there could be rating downgrades caused by new tax liabilities on the hospitals' operating revenues, according to the report.
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Over the summer, the Illinois Department of Revenue announced it would revoke the tax-exempt status of Northwestern Memorial's Prentice Women's Hospital in Chicago, Edward Hospital in Naperville and Decatur (Ill.) Memorial Hospital based on their levels of charity care. Illinois Gov. Pat Quinn has temporarily stopped the change until the legislature can define adequate levels of charity care.
Moody's Associate Analyst Carrie Sheffield, the author of the report, said if non-profit hospitals in Illinois lost their property tax-exempt status, it would strain the sector even more because "it places additional financial constraints on not-for-profit hospitals, requiring more expense reductions and process redesign."
Additionally, there could be rating downgrades caused by new tax liabilities on the hospitals' operating revenues, according to the report.
Related Articles on Illinois Non-Profit Hospitals:
Illinois Gov. Pat Quinn Holds State Decisions on Hospital Tax-ExemptionsIllinois Investigating 15 Other Systems' Charity Care; Hospitals Rev Up Lobbying
Illinois Department of Revenue Denies Tax-Exempt Status to 3 Illinois Hospitals