Pittsburgh Mayor Luke Ravenstahl fired back today at critics of an arrangement tied to the Pittsburgh Promise for college tuition that would shield the University of Pittsburgh Medical Center from future tax liabilities.
He focused on members of City Council who yesterday characterized the arrangement as a back-room side-deal that would give the hospital system special treatment, and who at times seemed to cross-examine UPMC General Counsel Robert Cindrich.
"UPMC is upset right now, and I don't blame them," Mr. Ravenstahl said. UPMC's commitment to the Promise amounts to $100 million over 10 years, subject to matching fund requirements, and the mayor said that "to be treated the way they were in City Council yesterday, it's a shame. ... I've been in discussions with UPMC, and needless to say, they're not happy with the way their gift has been handled."
UPMC, the key funding source for the Pittsburgh Promise of college help for city school graduates, plans to stop contributing to the city's coffers when it starts kicking into the tuition fund. Mr. Ravenstahl asked council to pass a resolution to ensure that UPMC doesn't have to pay both levies and scholarships if laws on its tax exemptions change. That spurred tough questions yesterday from Council President Shields, Councilman William Peduto and, to some extent, Councilman Len Bodack.
Mr. Ravenstahl argued that the protection UPMC is seeking is no different from that granted to more than 100 other tax-exempt organizations that are members of the Pittsburgh Public Service Fund. That fund channels donations from tax-exempt groups to the city coffers.
The contract between the city and the fund holds that if "taxes or fees are levied by the City against" members, their contributions through the fund "shall be credited against" those taxes or fees.
He acknowledged that there is one difference: Those organizations, including UPMC, are making contributions directly to the city, rather than to the separate fund that is being created to cover the Promise.
Mr. Ravenstahl said he did not think the arrangement would gut the city's efforts to raise $4.1 million a year from tax-exempt groups to help fund its own operations. He said a short delay in council approval of the arrangement would not necessarily kill the Promise, though if it did he'd be "very dejected."
