Allegheny County puts nonprofits on notice

Fitzgerald says reviews of 9,000 tax-exempt properties are coming

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Facing rising public pressure in a region dominated by tax-exempt giants, Allegheny County soon will require all nonprofits with property to prove they deserve their tax breaks.

At Tuesday's county council meeting, Executive Rich Fitzgerald announced plans to send letters to all 9,000 non-government tax-exempt properties in the county, demanding proof they're still in the business of doing good.

It's the county's first major effort to double-check property records that officials acknowledge are hopelessly out-of-date, with no way to know if a property bought years ago is still being used for charity.

"It's something we really need to work on," Mr. Fitzgerald said. "We want everybody to pay their fair share."

But hold your applause -- they're three years late.

Legislation passed by county council in 2007 -- when Mr. Fitzgerald was council president -- requires the Office of Property Assessment to review the credentials of nonprofits with tax-free land every three years. By all accounts, these letters should have been sent in 2010.

Why weren't they? Council member John DeFazio, D-Shaler, who sponsored the legislation six years ago, can only throw up his hands.

"We said it would be up to the administration to move on it," he said. "I'm not trying to pass the buck -- if you read it, that's the way it was written up."

Mr. Fitzgerald's plans are similar to the suggestions made earlier this month by county Controller Chelsa Wagner, who also suggested systematically running nonprofits through the state's five-part test to determine eligibility.

In a statement released after Mr. Fitzgerald's address, Ms. Wagner took the executive's proposal a step further, saying the reviews should be yearly.

"Just as every property owner is asked to pay property taxes annually, these organizations should be asked and able to prove why they deserve the privilege to not pay taxes annually," she wrote.

Never has the focus on nonprofits been tighter, stoked by contentious property reassessments that made the advantages enjoyed by tax-exempt agencies all the more clear.

While council members took pains to make clear they're not singling anyone out, the elephant in the room is UPMC, Allegheny County's largest nonprofit and a frequent target for critics who say the charity acts more like a Fortune 500 company.

Last week, protesters rallied outside the City-County Building, Downtown, against UPMC, saying the hospital chain barely resembles the charity it claims to be. Their statements drew support from both city and county officials, who have also raised questions about taxes owed by major nonprofits.

Last year, Mr. Fitzgerald said he'd consider asking nonprofits like UPMC to make payments in lieu of property taxes, a common arrangement in communities with large tax-exempt agencies. So far, nothing has come of it.

The task ahead of Mr. Fitzgerald's staff will not be easy. Auditors will have to contend with a huge backlog of data to sort through, thousands of responses to parse -- and more than a few nonprofits who might not appreciate hearing they're no long eligible for tax breaks.

"They picked up the ball ... and they're going to get it done," Mr. DeFazio said. "But it's a mammoth job."

Mr. Fitzgerald also formally submitted a request to allow natural gas drilling on 9,000 acres of Pittsburgh International Airport land, a necessary step in his plan to fuel economic development in the area through the Marcellus Shale.

Upticking his expectations again, the executive said Tuesday afternoon he believes the Allegheny County Airport Authority will reap up to $45 million in a lump sum payment through a deal with Consol Energy, which submitted the winning bid. With annual royalties and other fees added in, he hopes to see a total of $250 million come to the authority over the next few decades.

Although the deal is still under negotiation, Mr. Fitzgerald he's expecting to see six to eight well pads, most outside the fence line of the airport. Per FAA regulations, gas proceeds could only be used for the airport, perhaps lowering landing fees or laying down infrastructure for surrounding development.

Before voting, county council will hold a public hearing on the matter at 6 p.m. Feb. 7 at Robert Morris University's Sewall Center International Suite, 199 Campus Drive, Moon.


Andrew McGill: or 412-263-1497. First Published January 23, 2013 5:00 AM


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