Senator seeks new tax from nonprofits
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A local lawmaker intends to introduce legislation that would require the University of Pittsburgh Medical Center and insurance provider Highmark, as well as major universities and other large nonprofit entities, to pay real estate taxes on all of their property holdings.
"If you keep buying prime real estate and taking it off of the tax rolls, then the rest falls on the taxpayers out there," said Sen. Wayne Fontana, a Democrat from Brookline whose district includes both city and suburban neighborhoods, in a phone interview Tuesday.
"When they're paying less, everyone else is paying more."
In a separate action, Allegheny County Council on Tuesday got its first look at a measure that could strip all UPMC properties of their tax-exempt status if the health-care giant fails to renew its service contract with Highmark in pursuit of a "private profit motive."
Mr. Fontana has tried to introduce similar bills before, most recently in 2009. His proposal then garnered only four sponsors among his state Senate colleagues.
He thinks this time could be different, given the public's anger over the current UPMC-Highmark contract standoff.
"It has become very clear -- particularly in light of the ongoing dispute between the University of Pittsburgh Medical Center and Highmark -- that there are nonprofits out there with no concern at all about contributing to the common good or lessening the burden on government and taxpayers. Instead, it's about their bottom line," said Mr. Fontana, in announcing his intention to introduce the bill.
"In fact, UPMC's president was recently quoted as saying the decision to no longer negotiate was based on the 'realities of competition.' If that is indeed the case, why should taxpayers pay more to boost any nonprofit's bottom line?"
Because of its nonprofit status, UPMC is tax exempt, and, while Highmark pays some taxes, "They're making big profits, and it doesn't look like it's filtering down to the everyday person" through lower insurance premiums, Mr. Fontana said.
Michael Weinstein, spokesman for Highmark, said Tuesday the insurer has not had a chance to review Mr. Fontana's proposed legislation.
"However, Highmark and its for-profit subsidiary companies paid more than $260 million in federal, state and local taxes in 2010, which includes more than $3.5 million in property taxes," he said.
"Highmark and/or its subsidiary companies pay real estate taxes on all the property it owns."
UPMC spokesman Paul Wood declined to comment on the proposed bill.
Under Mr. Fontana's proposal, nonprofits would be required to pay taxes on the assessed value of their land, but not buildings. His proposed bill would exempt the first $200,000 in land value to protect small nonprofits.
County Councilman Ed Kress, R-Shaler, introduced the ordinance to end UPMC's property tax exemption.
His measure claims that "UPMC has opted to abandon its charitable purpose in order to engage in retaliatory and punitive measures that are not free from a profit motive."
First Published September 7, 2011 12:00 am
