UPMC and the city of Pittsburgh would benefit from ending the costly and corrosive legal battle over UPMC’s tax exemption. A viable solution needs to recognize UPMC’s importance to the region as an economic driver, while acknowledging the critical functions of Allegheny County, the city of Pittsburgh and the Pittsburgh school district.
If we ask more of UPMC, we must do so in a way that benefits UPMC and accounts for its substantial contributions through the Pittsburgh Promise and other programs. An ideal solution would further UPMC’s mission “to shape tomorrow’s health system through clinical and technological innovation” while identifying a path to help fund local government.
In lieu of taxes, UPMC could make a substantial annual contribution — say, $5 million per year — to a newly created “UPMC Medical Innovation Fund.” Operated as a public-private partnership with a board composed of UPMC and local government representatives, the fund could provide startup capital for innovative medical research conducted by for-profit companies emerging from UPMC, the University of Pittsburgh and Carnegie Mellon University. The fund could be housed in UPMC’s anticipated Center for Innovative Science and collaborate with Pitt’s Center for Medical Innovation. As emerging medical research and technology businesses become profitable with the fund’s assistance, they will in turn become new taxpayers for local governments.
Similar programs launched recently include Australia’s Medical Research Innovation Fund and the University of Chicago’s Innovation Fund. This path to resolving the tax dispute would augment the reputations of both UPMC and the city as destinations for elite scientists, physicians and entrepreneurs while creating future taxpayers for local government.
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