Tax Lawsuits and Credit Ratings

Champaign County government's credit rating has lost its "negative outlook." More on that below. First, a quick follow up to yesterday's post highlighting various County property tax litigation. The News-Gazette this morning had more information on the decision yesterday requiring OSF to make payments for now:

If the full $729,695 payment isn’t made July 1, however, the hospital would be subject to interest charges at the rate of 1.5 percent per month and the hospital properties would become subject to a property tax lien.

Champaign County Assistant State’s Attorney Joel Fletcher said the Department of Revenue has taken only preliminary action on OSF’s requests for exemptions. The county filed an objection to the exemptions, and a final determination by the department is still pending.

How long before that final determination would come is unknown, because the county has also asked the department to hold off on the OSF hearing until after a decision is issued on a separate lawsuit concerning the Carle health system’s property taxes. The Carle case went to trial in Champaign County earlier this year, but lawyers have been filing post-trial documents since then, and when a decision will be forthcoming is unknown.

Bohm said Heart of Mary wouldn’t be irreparably harmed without a temporary restraining order because if the hospital prevails before the Department of Revenue, it would be in line for a refund on its Champaign County tax payment, plus interest.

More information at the full article here and yesterday's post here: Champaign County Roundup.

The News-Gazette also had an update on the County's credit rating after the Nursing Home sale this morning as well:

Champaign County Executive Darlene Kloeppel said this week that Moody’s Investors Service has affirmed the county’s Aa2 credit rating.

The rating is used in part to determine interest rates for a governmental body’s tax debt...

While the county had an Aa2 credit rating before, Moody’s had characterized it as having a "negative outlook," influenced by the money it was spending on the nursing home.

“Moody’s thought they needed to review us because something was at risk,” Kloeppel said. “In this case, it was the nursing home.”

Following the sale of the home earlier this year to a private company, Moody’s re-evaluated the county’s financial situation and determined that the negative outlook was no longer necessary.

Full article here.