UPMC, Pittsburgh drop tax-status fight
Pittsburgh dropped its legal challenge of UPMC's tax-exempt status because the two sides hope to establish a fund for nonprofits to invest in city neighborhoods and housing, Kevin Acklin, the mayor's chief of staff, said on Monday.
He said talks are just starting and he couldn't provide details.
Mayor Bill Peduto took office in January hoping to secure as much as $20 million a year in lieu of taxes from major nonprofits for critical needs such as roads and bridges. Dropping the lawsuit against UPMC is a first step, Acklin said.
“I think what both sides were trying to accomplish here was just to have a period of peace,” Acklin said. “To have these discussions outside of litigation.”
The city declined to appeal Allegheny County Common Pleas Judge R. Stanton Wettick's ruling that UPMC's employees work for 37 subsidiaries, meaning the city couldn't pursue collecting an estimated $20 million a year in payroll and property taxes in a single lawsuit.
The city told UPMC about its decision on Friday, UPMC spokesman Paul Wood said.
The health care giant responded on Monday by dropping its lawsuit in federal court that claimed the city, former Mayor Luke Ravenstahl and a union group conspired to violate UPMC's constitutional rights by challenging its tax status.
“Now that the city has terminated the lawsuit initiative by former Mayor Ravenstahl seeking to strip UPMC of its payroll tax exemption, UPMC believed it was appropriate to drop our countersuit,” Wood said.
The city's lawsuit, which was filed in state court in March 2013, chilled relations between the Ravenstahl administration and the nonprofits.
A task force established by a mandate from one of the state agencies overseeing the city's finances was looking at ways to increase nonprofit support. A month after the city sued UPMC, several members of the task force sent a letter to Ravenstahl saying that the action jeopardized their work.
About 40 nonprofits have contributed $30.9 million to the city since 2005. The largest amount — $14 million — came in between 2005 and 2007, when the city was dealing with chronic deficits and out-of-control employee pension costs, according to Pittsburgh's financial recovery plan.
Contributions since then have declined.
About 40 nonprofits agreed to contribute $2.6 million to the city in 2012 and 2013 through the Pittsburgh Public Service Fund. Reynolds Clark, chief of staff and vice chancellor for external relations at the University of Pittsburgh, chaired the group. He said the fund disbanded in April once it made its final payment from 2013.
The city budgeted $2 million this year in nonprofit contributions, but that represented money owed from 2013. Its five-year financial plan budgets $830,000 annually from nonprofits after 2014.
Brian Bowling is a staff writer for Trib Total Media. Reach him at 412-325-4301 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Three arrested in armed robbery in Lawrenceville
- Pittsburgh police say officers in video did not use excessive force
- U.S. Marshals fugitive task force arrests man wanted in McKeesport homicide
- Charges officially dropped against Ford, who is recovering from surgery
- Appellate court upholds most of jury’s verdict against officials of Lemington Home for the Aged
- W.Va. natural gas line explodes near Ohio border
- Mt. Lebanon High School to sell its planetarium equipment
- Hillview Street in Overbrook to be closed until Feb. 9
- Storm could drop 4-6 inches of snow on Pittsburgh area
- Project to End Human Trafficking volunteers help Uganda
- Grandview development plan inches ahead in Mt. Washington