City: Nonprofits pay fraction of tax rate of what their taxes would be
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Large, cash-rich universities and hospitals are paying the city of Pittsburgh small fractions of what they would if they were taxable institutions, acting city Controller Tony Pokora said in releasing an audit yesterday.
Mr. Pokora looked at the property owned by eight institutions of higher learning and 14 health-care concerns, in an effort to find out what they would be paying in taxes if they weren't exempt. Some are members of a group called the Pittsburgh Public Service Fund that channels voluntary contributions to the city, but has not agreed to do so beyond this year.
He found that they owned $3 billion in untaxed property, on which they would otherwise have to pay $32 million in property taxes. Instead, they are among a group of some 100 tax-exempt entities paying the city around $4.4 million a year, through the fund.
"That's not even close to being enough," Mr. Pokora said of the voluntary contribution. The city's financial woes, he said, are largely driven by "the eradication of the tax base by the nonprofits, year, after year, after year," as they buy more land.
The University of Pittsburgh, Mr. Pokora found, has tax-exempt property assessed at nearly $1.4 billion, which would be a $15 million city tax bill.
Documents obtained by the Post-Gazette indicate that Pitt paid $800,000 -- 5 percent of what its tax bill would have been -- into the fund in 2005, the only year for which information is available. The fund has sought to keep the amounts of donations secret, and Mr. Pokora said he did not know how much institutions gave.
The University of Pittsburgh Medical Center's tax-exempt property is assessed at $773 million, which would equate to an $8.3 million tax bill, according to the audit. UPMC paid $1.5 million into the fund in 2005, or 18 percent of what its tax bill would have been. UPMC this week reported a $459 million surplus in the first nine months of its current fiscal year.
Mr. Pokora suggested that the city and the nonprofit organizations join together to lobby for state payments to make up for the lost revenue. Barring that, the city should negotiate a long-term agreement with the fund, or get discounted or free services from hospital systems and other entities, he said.
First Published May 11, 2007 11:27 pm