Allegheny County, Pittsburgh officials push to re-evaluate nonprofit tax exemptions

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Allegheny County would bring in $95 million more in property taxes each year if nonprofits ponied up, according to a report that county Controller Chelsa Wagner plans to discuss Tuesday at a meeting of local officials who may try to challenge some groups' tax exemptions.

"While some [exemptions] are justified, for places like churches, others are plainly unfair," Ms. Wagner said in a statement. "These breaks are hurting real people, because public transit, human services, education and overall quality of life continue to decline."

City Councilwoman Natalia Rudiak will hold a post-agenda meeting at 1 p.m. Tuesday to examine the impact of nonprofits, and she wants to zero in on the University of Pittsburgh Medical Center. Besides city and county officials, scholars and representatives of nonprofits have been invited to attend.

Ms. Rudiak said UPMC pays virtually no property taxes in Pittsburgh. "Additionally, many service workers at UPMC are not making family-sustaining wages," she said in a statement. "Roughly half of the service workers at UPMC make less than $12 per hour ... while the living wage to support a family of four in Pittsburgh is $25.40 per hour."

In all, city council staffers have estimated that the city would bring in an additional $60 million to $70 million annually if nonprofits paid property taxes on all of their holdings and also paid the payroll-preparation tax.

The meeting comes as city council considers a new, two-year agreement with a consortium of nonprofits that's likely to yield less than $5.5 million in voluntary contributions to the city over the next two years. UPMC is not part of the consortium, but it has made a multiyear $100 million pledge to the Pittsburgh Promise college scholarship program.

In addition, UPMC spokeswoman Susan Manko said in an email, the organization last year provided $565 million in free care, education and other community programs. She said UPMC's workforce of more than 55,000 paid nearly $118 million in state and local income taxes last year, while the institution itself paid $176 million in federal and state employment taxes. She noted that UPMC in recent years also invested $622 million on the new Children's Hospital in Lawrenceville and saved 3,000 jobs with its $120 million rescue of Mercy Hospital.

She said UPMC's annual impact is $21.5 billion, representing more than 10 percent of the region's gross domestic product.

"In short, there's not another major, not-for-profit academic medical center anywhere in the United States that does more for its region than UPMC already does for Pittsburgh, Allegheny County and Western Pennsylvania," she said.

City Council President Darlene Harris and Ms. Wagner want to see whether a recent state Supreme Court ruling on the definition of a charity has created an opening to attack some groups' tax exemptions.

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Joe Smydo: jsmydo@post-gazette.com or 412-263-1548. First Published June 25, 2012 12:00 AM


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