A February Policy Brief detailed an executive order from the mayor of Pittsburgh that called for a review of tax-exempt property owned by purely public charities.
In March, a press release from the mayor’s office included a list of 26 parcels the city felt “do not meet the purely public charity test and/or the property does not serve a charitable purpose.” Those parcels were submitted to Allegheny County’s Office of Property Assessments to have the tax-exempt status challenged.
The county’s property assessment website shows the properties’ use codes range from charitable hospitals and homes to condominium units to single-family homes and vacant land. Ten of the properties are owned by either a hospital or a university, which are the two groups most often cited in attempts to levy taxes or fees on nonprofits. Properties sold as long ago as 1950 to as recently this year. The assessed value ranges from $20.3 million to $800.
Previous studies of tax-exempt property calculate a “tax loss” by applying a taxing body’s millage rate to the assessed value of the exempt property as if it were taxable. That can be done with these 26 parcels as well. The total assessed value for the group is $72.6 million; with a combined millage rate of 23.79 mills between Pittsburgh, Allegheny County, Pittsburgh Public Schools and special levies for parks and libraries, the properties would generate $1.7 million annually in property taxes if deemed to be taxable.
As of July 25, seven of the parcels are now classified as taxable, presumably as a result of the city’s challenge. The assessed value is $8.3 million; the annual tax collections between the three taxing bodies would be $197,045. Three of the parcels last sold sometime between 1976 and 1992, and if the charitable exemption has been in place all those years incorrectly, the accumulated tax loss would be significantly larger.
How long it will take to determine the status of the remaining 19 parcels (or if their tax-exempt status has been upheld) is not known. As mentioned in previous Briefs (here, here, and here) Allegheny County is to review the status of charitable property every three years, but the first review is not yet complete. An open records request response from June shows that of the 2,800 parcels under review, there were 498 (18 percent) still pending. These could very well be large, complex parcels and some or many may be located in the City of Pittsburgh.
