Valley View School District 365U will have to pay back $4.8 million to Adventist Bolingbrook Hospital, now that the nonprofit hospital has tax-exempt status from the state of Illinois.
Will County taxing bodies owe the hospital a total of $7 million, Adventist Bolingbrook Hospital CEO Rick Mace recently wrote in a letter to the hospital's board of directors. The hospital has paid property taxes since it was built in 2008. The $7 million amount represents taxes paid in the past three years.
"It's going to impact us pretty heavily," Gary Grizaffi, assistant superintendent of administrative services, told the Valley View school board Monday.
Last year, the Illinois General Assembly passed legislation to clarify property tax exemptions for hospitals, Mace wrote. Adventist Bolingbrook Hospital "not only met, but far exceeded" the new requirements, he said.
"We believed that in our situation, the morally right decision was to pay our taxes, under protest, to Will County in full, letting the county know we were certain the hospital would be recognized as deserving tax-exempt status," Mace wrote. "We fully expected to receive a refund of our tax payment."
Under state law, the hospital can recoup three years worth of property taxes. Grizaffi said the recouping of previously paid property taxes is the "crux of the problem."
"Moving forward, we'd be okay with the idea that they're now tax-exempt," Grizaffi said. "Going back really leaves us high and dry."
The bill won't go away, Grizaffi said, and the school district currently has three years to pay back the $4.8 million. Grizaffi said he hopes that time period is "stretched further."
There is "small solace," he said, in that Adventist Bolingbrook Hospital is waiving a 6 percent interest rate on the $4.8 million.
Mace wrote that county government leaders are the hospital's partners, he said, and "we have full confidence they will work expeditiously on this effort."
As the board "know(s) well, $7 million is not an insignificant amount," he wrote.
"It translates into emergency care 24 hours a day, 365 days a year for our community’s most underserved residents. Unfortunately, every dollar tied up elsewhere is a dollar not spent on sick and needy patients. We have conveyed those concerns, and we believe those who serve us have heard."
Moving forward, the hospital still has properties that will be paying taxes, but the hospital portion is exempt.