Tuesday, November 20, 2007
County Government Gets In on Non-Profit Act
Though it has never popped up on the political landscape before, it should not come as a complete surprise that Allegheny County Council is now looking into reviewing the tax-exempt status of non-profit owners as a way to possibly generate revenue. Our 2003 report on the City’s tax-exempt property found that the County as a whole had about $13 billion, or 18 percent of total value (taxable and exempt) held by tax-exempt entities. A newspaper report puts the value at $15 billion now.
Considering that the County has problems, such as its own budget deficit and its continuing financial support of the Port Authority causing a strain, it is basically taking a page from the City’s book and will review to make sure that all exempt property is being used for purposes that qualify it for exempt status.
It won’t be long before the Pittsburgh Public Schools, and other municipalities and school districts in the County begin to agitate for their own voluntary payments in lieu of taxes or something akin to the Pittsburgh Public Service Fund, which holds voluntary payments from non-profits for the City’s operations. That’s what a previous blog entry pointed out as a shortcoming with the plan to use the Johnstown flood tax revenue to compensate cities and towns for tax-exempt property—school districts and counties would not be able to participate in the program.
Of course, the County is not going to tax itself, other levels of government or authorities, and no one wants to go after churches or pure charities, so that basically pits the government against the university and hospital community, specifically UPMC. Both categories have their exemption granted by statute, so the General Assembly could remove their tax-exempt status, which seems doubtful.
This issue of hospitals and universities tax-exempt status needs a full debate. Abuse of tax-exempt status is not desirable, appropriate, and should not be allowed. Only where the public interest and welfare is best served by granting a tax-exemption should such exemption remain in place. Perhaps the time has come for a statewide examination of the tax-exempt status for some institutions.
Considering that the County has problems, such as its own budget deficit and its continuing financial support of the Port Authority causing a strain, it is basically taking a page from the City’s book and will review to make sure that all exempt property is being used for purposes that qualify it for exempt status.
It won’t be long before the Pittsburgh Public Schools, and other municipalities and school districts in the County begin to agitate for their own voluntary payments in lieu of taxes or something akin to the Pittsburgh Public Service Fund, which holds voluntary payments from non-profits for the City’s operations. That’s what a previous blog entry pointed out as a shortcoming with the plan to use the Johnstown flood tax revenue to compensate cities and towns for tax-exempt property—school districts and counties would not be able to participate in the program.
Of course, the County is not going to tax itself, other levels of government or authorities, and no one wants to go after churches or pure charities, so that basically pits the government against the university and hospital community, specifically UPMC. Both categories have their exemption granted by statute, so the General Assembly could remove their tax-exempt status, which seems doubtful.
This issue of hospitals and universities tax-exempt status needs a full debate. Abuse of tax-exempt status is not desirable, appropriate, and should not be allowed. Only where the public interest and welfare is best served by granting a tax-exemption should such exemption remain in place. Perhaps the time has come for a statewide examination of the tax-exempt status for some institutions.
