County Calls Both Sides of Non-Profit Coin

County Calls Both Sides of Non-Profit Coin

Will there be signs of an identity crisis at County Council’s regular business meeting tomorrow night? On the one hand, Council is scheduled to take up business regarding the issuance of over $1 billion in refinancing bonds through the County Hospital Authority for the benefit of UPMC. The taxpayers are not on the hook for any of the bonds, the purpose of which, according to the legislation, is "to benefit the health and welfare of the citizens of Allegheny County, Pennsylvania".

Soon thereafter, at the same meeting, Council is expected to consider two separate pieces of legislation, both concerning the tax-exempt status of parcels owned by UPMC. One would direct the Solicitor to "undertake a challenge to the tax exempt status of all parcels owned by UPMC within Allegheny County". The second would deal specifically with the parcels comprising the UPMC Braddock hospital site, the hospital slated for closure by UPMC.

Council is purely within its rights under the state’s tax exempt property law (The "Institutions of Purely Public Charity Act" of 1997) and if there are properties in use by the medical system that don’t meet the law’s test then those properties would have to pay real estate taxes if they are not already. For instance a 2009 report by the state’s Legislative Budget and Finance Committee noted that the University of Pittsburgh (not UPMC) paid $700k in real estate taxes to the City, County, and School District in 2007.

So would County Council breezily approve the refinancing deal and then show a hard line approach on the parcel legislation? It is hard to say. Even City Council has brought up the idea of adding additional layers of approval for building projects located in zoning districts labeled industrial or medical-educational while praising the benefits of "eds and meds". That goes without mentioning the "educational privilege tax" proposal.

This season is shaping up to be a challenging one for the non-profit community in the region.