Tax-exempt fees proposed for Pa.

Brookline's Fontana says large nonprofits should pay for services

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Large tax-exempt landowners would have to pay their host cities fees based on the size of their buildings, under legislation that state Sen. Wayne Fontana plans to introduce next week.

The Brookline Democrat's proposal would add another wrinkle to the decades-old debate over nonprofit institutions and their obligations to cities and towns -- an issue that has been stoked to a boil by Pittsburgh Mayor Luke Ravenstahl's proposed 1 percent tuition tax. It comes days after state Rep. Paul Costa, D-Wilkins, a Point Park University trustee and faculty member, said he'll try to pre-empt the tuition tax.

Mr. Fontana said it's time to "at least get a discussion or a debate going on what nonprofits should do. It's my opinion that they have a financial obligation to the city or municipality for the services they get."

The formula he plans to put into legislation co-sponsored by Rep. Tim Solobay, D-Canonsburg, would exempt the first 50,000 square feet of floor space of a given nonprofit entity's buildings, meaning small organizations would likely be unaffected. Any square footage above that level would be assessed at $100 per 1,000 square feet. Organizations could escape the fee by entering into voluntary agreements with their hosts, he said.

Under the fee formula, the University of Pittsburgh Medical Center, for instance, would pay $145,000 alone for its new Children's Hospital in Lawrenceville.

The total square footage of buildings owned by large, tax-exempt institutions in the city wasn't available yesterday. It's unclear, therefore, how the payments resulting from Mr. Fontana's formula would compare to the $31.7 million the city forgoes in property taxes, according to a 2007 city controller's office study, because it hosts large colleges and hospitals.

UPMC released a statement noting that it has been the largest voluntary contributor to the city, has backed the Pittsburgh Promise of college tuition with a $100 million pledge, and provided $518 million in charity care last fiscal year. Several universities did not respond to requests for comment.

Mr. Ravenstahl's administration welcomed the idea, but did not know if it would plug a $15 million budget gap driven by the need to shore up a pension fund that has one-third of the money needed to cover its obligations.

"It recognizes a problem and it brings it to the fore," said city chief of staff Yarone Zober. "It's great to have somebody like [Mr. Fontana] in Harrisburg, who understands local government."

Meantime, Mr. Costa said his planned legislation to ban tuition levies could be introduced next week.

"As a parent of two children that are in college that go to a city university, I'm not happy about this" tax, he said, adding that he has another child in 10th grade. A 1 percent tax "might be just the difference that gets people to consider [studying in] another city."

"It's easy to say no to something," said Mr. Zober. But anyone seeking to stop the tuition tax should also "help us get to a solution," perhaps by permitting an increase in the city's tax on those who work within its borders from $52 a year to $144.

Mr. Costa is a part-time faculty member at Point Park, paid to teach one course per semester, and a volunteer member of its board. "Do I see that as a conflict? Not particularly," he said. "The fact that I teach one course a semester, I don't think that impacts my life that greatly."

He also plans legislation requiring two-thirds votes of local councils, and the General Assembly itself, to pass tax increases during lame duck sessions. He noted that two of the five declared supporters of the tuition tax on City Council are lame ducks.

Rich Lord can be reached at or 412-263-1542.


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