I spent most of the day in Pittsburgh at the Finance Committee hearing concerning Act 55 the Purely Public Charities Act. It was an interesting morning and early afternoon at the Pittsburgh City Council Chambers. This issue primarily involves the standards set in the law that allow nonprofit agencies to be exempt from taxes. Pittsburgh was the epicenter for the controversy that precipitated the current law. The City of Pittsburgh testified about the lost revenue since the law was passed in 1997. The hospitals, represented by legal counsel as well as UPMC individually testified that they like the law as is. For those who don’t understand much about this matter, the law exempted hospital and other charitable organizations from paying taxes, most controversially, property taxes. Municipalities, counties and school districts often feel that, particularly the larger nonprofits, use many of the services government provides and that the organizations should pay at least something for it. Many cities now have about 35% to 50% of their total properties exempt from taxes. This shifts a larger burden of taxes unto the homeowners and businesses. Often hospitals and colleges are the largest employers and are viewed as corporate giants in that community. Some of these organizations have agreements to make a voluntary payment and some don’t. This is a complicated issue and one that will probably be a subject of legislation soon.
- John
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