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If County Nursing Home is sold, will you still have to pay property tax for it? You might be surprised…

May 22, 2018

Dear friend,

The sale of the Champaign County Nursing Home (CCNH) is imminent. The Champaign County Board will be meeting this week – on Thursday, May 24 at 6:30 p.m. – and will be voting on the sale of the CCNH. One issue that must be addressed, and that county residents have a right to know about is what happens to the property taxes levied to support the CCNH?

CCHCC has inquired to the County about what would happen to the two property tax levies that are currently being assessed for the Champaign County Nursing Home.

You might be surprised to learn about the County’s plans, with regard to the property tax that was levied as a result of a voter referendum “for the purpose of maintaining a county nursing home”. Read below to learn more.

About the 2002 Referenda that Established Property Taxes for CCNH
In the general election of 2002, there were two Champaign County referenda on the ballot regarding the County Nursing Home.

One referendum question was for “Bond Issuance for Champaign County Nursing Home Capital Improvements”.

The second referendum question was for “Property Tax to Support Operations of the Champaign County Nursing Home”.  Specifically, this referendum question asked: Shall Champaign County be authorized to levy and collect a tax at a rate of .03% for the purpose of maintaining a county nursing home?”

To see the referenda that established both the Bond (for CCNH construction – the one that will go away), and the levy to support CCNH operations, you can look here on Page 112:

To see the line item listing of the Levy Rate Projections for Champaign County, you can look here:

What are the County’s plans for the CCNH property taxes?
Regarding the property taxes for the Bond Issuance, County Administration has said the following:

“The bonds are limited in that the tax will go away – even without the sale of the Home – at the end of the term of the bonds which will be in 2022.”  (from 5/7/18 correspondence via e-mail)

In other words, the property tax for the bonds, established by voter referendum in 2002, will go away at the end of the term of the bonds.

But what about the property tax for “maintaining a county nursing home”, also established by voter referendum in 2002?
County administration stated that “The operating tax is permanent.” (from 5/7/18 correspondence via e-mail)

County administration also stated that “…if the Home sells, we completely expect that the Nursing Home operating tax collected in 2019 and potentially in 2020 will have to be used to repay the County’s general fund and other special revenue funds for nursing home expenses that have been incurred but not repaid. We do not anticipate the $11 million will be enough to cover all bond payments, outstanding payments to vendors, costs associated with the sale and repayment to the County’s funds of outstanding obligations.” (from 5/7/18 correspondence via e-mail)

In other words, the property tax levied by voter referendum in 2002 for the purpose of “maintaining a county nursing home” would continue to be collected in 2019 and 2020 to help repay nursing home-related debts, because the $11 million from the sale of the nursing home would not be enough to repay all outstanding nursing home obligations.

But what happens to this property tax after nursing home-related debts are paid off?
Specifically, CCHCC asked County administration the following:
“But after that, does the tax go away? Or when you say that it is permanent, do you mean that the county will continue collecting it?” (from 5/9/18 correspondence via email)

The answer might surprise you.
County administration answered with the following:
What will most likely happen with the Nursing Home Operating Tax is that the levy (dollars collected) will be redistributed to other levies – part of it could go to the General Fund Levy, part could go to the Tort Immunity Levy (from which the County pays for Self-Funded Insurance and property/liability settlements), or it could be re-distributed by the County Board to any other levy where the Board sought to appropriate additional growth.  Once the levy from the Nursing Home is re-appropriated to other levies under the County Board’s authority, the Nursing Home levy will no longer appear on the County Board’s Levy Rate Chart or be mentioned in the County Board’s Annual Tax Levy Ordinance.  (from 5/14/18 correspondence via e-mail)

In other words, the County would continue to collect property taxes resulting from a voter referendum in 2002, specifically for the purpose of “maintaining a county nursing home”, but would use it for other purposes. Also, the line item showing the purpose of this levy would disappear from the County Board’s Levy Rate Chart and would also not be mentioned in the County Board’s Annual Tax Levy Ordinance.

This does not seem right.
How can the County possibly continue to collect a property tax levy established by voter referendum for a very specific purpose, once that purpose is exhausted? How can the county continue to collect that property tax, but make it “invisible” to the county property tax payers and just re-distribute it for other purposes?

CCHCC asked County Administration the following:
“Is there a legal opinion stating that the County can continue to collect this tax on a permanent basis, even after the CCNH is sold and the CCNH-related debts are paid off?” (from 5/18/18 correspondence via e-mail)

County Administration is now seeking a legal opinion on the legality of this issue.
County administration responded by informing CCHCC that they have “requested a legal opinion with regard to this issue” and will keep us informed. (from 5/20/18 correspondence via e-mail)

Contact your County Board Members
Contact your County Board Members and ask them if they were aware of the county’s plans to continue to collect and use the nursing home property tax levy for purposes other than the nursing home.

Stay tuned
Please stay tuned for more important information about the Champaign County Nursing Home and the bid to purchase it, and what the County plans to do with your property taxes levied for the purpose of “maintaining a county nursing home”.

Thank you for your activism to help protect Champaign County’s public assets!

Claudia Lennhoff
Executive Director
Champaign County Health Care Consumers