Any organization receiving a break on Allegheny County real-estate taxes should be required to prove its tax-exempt status annually, county Controller Chelsa Wagner recommended today.
Such a policy would help the county recoup a portion of $95 million in potential county property taxes that would otherwise be paid if their owners did not qualify for the exemptions, she said.
"While some exemptions are fair, like those for churches and soup kitchens, others are plainly unfair, and these unfair tax breaks are causing real hurt to real people as public transit, human services, education and other essential functions of government are cut," Ms. Wagner said in a statement. "We need to protect county taxpayers by ensuring that the only organizations that get property-tax breaks are the ones that deserve them."
She cited a recent state Supreme Court decision that allows taxing bodies -- counties, school districts and municipalities -- to challenge the tax-exempt status of commercial properties owned by non-profit organizations.
The five largest owners of tax-exempt property are the University of Pittsburgh Medical Center, University of Pittsburgh, Carnegie Mellon University, West-Penn Allegheny Health System and Duquesne University.
Allegheny County itself owns more than 15 percent of the total property value that could be taxed. The county should review its tax-exempt holdings to determine what could be sold and returned to the tax rolls, Ms. Wagner said in a "Taxpayer Alert" issued by her office.
The potential tax revenues left uncollected by the county represents only a fraction of the total property tax revenues that could be paid to municipalities and, especially, school districts.
Ms. Wagner's office calculated that tax-exempt properties would pay Pittsburgh Public Schools $121 million in potential revenue each year. The city has $8.7 billion in tax-exempt properties within its borders.
Former County Executive Dan Onorato sought to get commitments of $4 million in lieu of taxes from large non-profits, but he was able to persuade them to pony up only a small portion of that amount. Pittsburgh has made similar efforts.
A representative from Ms. Wagner's office is expected to meet with Pittsburgh City Council on Tuesday to discuss the recommendation.
Len Barcousky: email@example.com or 412-263-1159. First Published June 25, 2012 11:30 AM