Allegheny County schedules hearing on UPMC properties

Health care giant's tax-exempt status of holdings is focus

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Allegheny County Council will take a look at the tax-exempt status of UPMC real estate at a public hearing Dec. 5.

"People have been asking a lot of questions about this [topic]," Councilman John DeFazio said at a council meeting last week. "It's a good idea to have this meeting and air it out properly in front of everybody."

His comment was met with loud applause from the two dozen people who attended Wednesday's council meeting to show their support for a public hearing.

Mr. DeFazio, a Democrat from Shaler, will preside at the session. It is scheduled for 5 p.m. Dec. 5 in the Gold Room of the Allegheny County Courthouse.

A recent Pittsburgh Post-Gazette investigative series found that UPMC was the county's largest single property owner, controlling real estate valued at $1.6 billion. The health care giant has been able to claim 86 percent of its property as tax exempt as a result of its status as a charitable corporation.

The public hearing is taking place at the same time as the Service Employees International Union has been seeking to represent University of Pittsburgh Medical Center workers who do a variety of jobs.

Several speakers told council that UPMC supervisors have sought to discourage organizing efforts by the SEIU.

"We've been warned not to talk about a union," Al Turner, a UPMC shuttle driver of the North Side, told council members. "And if we do any organizing on company property, we will suffer the consequences."

How to sign up

  • Allegheny County residents and taxpayers who want to speak must register at least one day before the Dec. 5 event.
    Presentations must be limited to three minutes.
    "Request to Comment" forms can be picked up in person or downloaded from the county council website, Then click on the "Request to Comment" tab on the left side of the page.
    Completed forms must be received by county council at least 24 hours prior to the hearing. They can be mailed, faxed or dropped off. The address is County Council Clerk, Allegheny County Council, Room 119 Courthouse, 436 Grant St., Pittsburgh, 15219. The fax number is 412-350-6499. Written testimony will be accepted through 5 p.m. Dec. 7.

Hospital secretary Leslie Poston of Wilkinsburg said the health care giant had lost sight of its mission. "The people running UPMC have forgotten that they were supposed to do something more than make a lot of money," she said.

UPMC spokesman Paul Wood called the claims that UPMC was intimidating workers who favor unionization "an outright fabrication by the SEIU."

The company was following all National Labor Relations Board rules.

"We are educating our employees about what [unionization] would mean and what things they would be giving up," Mr. Wood said. All future pay increases, for example, would depend on the results of contract negotiations rather than being automatic, he said.

Average annual salaries at UPMC are about $60,000, he said. Minimum pay for lower-skill, entry-level jobs is $10 per hour and rises to $12 in a few years, he said.

Barney Oursler, the executive director of Pittsburgh United, estimated that UPMC avoids paying more than $200 million in annual property taxes as a result of its nonprofit status. He urged county council to take a hard look at how what he called "a $10 billion global enterprise" carried out its charitable responsibilities.

Pittsburgh United is a coalition of labor, environmental, community and faith-based organizations.

Mr. Wood defended UPMC's status as a charity and as a good corporate citizen.

He asked why county council was not also looking into the tax-exempt status of other large nonprofits such as Highmark, the region's dominant health-insurance provider, or West Penn Allegheny Health System, the second-largest hospital chain. Highmark and UPMC have waged a very public battle over whether UPMC will continue to accept Highmark patients, and Highmark is trying to negotiate an alliance with West Penn to help operate the struggling system.

County Executive Rich Fitzgerald said he supported the idea of a public hearing to look into tax-exempt properties. He agreed with Mr. Wood that county council should widen its probe to look at all nonprofits.

Mr. Wood estimated that UPMC, the region's largest employer, provides about $565 million annually in community benefits. The biggest contributions are $250 million for research and education programs and $200 million in charity care, he said.

"Any sort of new additional tax on UPMC will limit the amount of money available to reinvest in the region and in maintaining our 56,000 jobs," he said. "It would limit how many new jobs we can create. ... The taxes have to come out of somewhere."

He pointed to the $300 million Center for Innovative Science under development in Bloomfield as an example of how UPMC invests in the community. The new research facility, scheduled to open in late 2014, is expected to create about 400 jobs.

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Len Barcousky: or 412-263-1159.


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