Fight over UPMC's tax status will pass to new Pittsburgh mayor

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UPMC may not find a friend in the next mayor, either.

Mayor Luke Ravenstahl will leave his successor in an expensive and time-consuming brawl with the city's biggest employer, but it was a fight that most of those seeking to replace him said they would continue come January.

Of the five major Democrats running for the party's nomination May 21, three hailed Mr. Ravenstahl's decision to challenge UPMC's charitable status. Two of them -- Pittsburgh City Council President Darlene Harris and city Controller Michael Lamb -- stood behind the mayor as he announced his legal challenge.

City Council already had been studying similar challenges and on Tuesday went on record opposing a state Senate plan to block municipalities from challenging the tax status of big institutions like UPMC.

"We just believe that a nonprofit needs to be a nonprofit," Mrs. Harris said.

Mr. Lamb criticized the health care giant's treatment of its employees and said city residents likely supported getting more support from UPMC, too.

"Nobody likes to pay taxes, but your citizenry buys into taxation when it's fair. We need organizations like UPMC to be paying their fair share," Mr. Lamb said. "Right now they're not."

The Ravenstahl administration did not brief its longtime critic, Councilman William Peduto, on the challenge, but he called it "a good first step" and said he would expand the city's efforts to investigate the tax status of other large nonprofits. He has worked for years with officials in the Pennsylvania Municipal League to study ways to make them pay more for services.

"It's a matter of tax fairness. I would use an equal criteria on all large institutions," Mr. Peduto said.

Jack Wagner, the former state auditor general, was sympathetic to Mr. Ravenstahl's complaints, saying they reminded him of ones aired by late Mayor Richard Caliguiri in the 1980s, but stopped short of signing on to the challenge. Asked if he would continue the legal battle come January, he said "if what the mayor is saying today is correct, yes. But I have to have my lawyers look at it and review it."

The other Democratic mayoral hopefuls, state Rep. Jake Wheatley of the Hill District and political newcomer A.J. Richardson of Sheraden, could not be reached.

The sole Republican on the ballot, Josh Wander of Squirrel Hill, said the challenge bears study but warned it could hurt the city's economy if UPMC was forced to cut jobs or spending due to the fight.

SEIU Healthcare Pennsylvania, which is battling with UPMC over unionizing employees, has not endorsed a candidate in the city mayoral race.

Mr. Ravenstahl himself noted that the UPMC fight would be a tough one and ultimately laid at the feet of his successor.

He had not budgeted its cost to the city but said it "will be significant and substantial but it's in my mind an investment worth making ... I don't see this thing being resolved between now and December."

He also said the legal challenge was in the works before his March 1 announcement that he would not seek re-election. He received a legal opinion on the matter four days after his announcement and the city has a March 31 deadline to challenge UPMC's tax status.

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Tim McNulty: or 412-263-1581.


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