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City of Pittsburgh v. UPMC: Necessary lawsuits

| Thursday, March 21, 2013, 8:55 p.m.

UPMC was quick to spin the City of Pittsburgh's legal challenge of its tax-exempt status as a vendetta fueled by politicians doing the bidding of organized labor and business interests. It's a smokescreen, of course. And rationalizations of such grand conspiracies can't hide the fact the “nonprofit” claims of this $10 billion worldwide hospital behemoth are ripe for vetting in a court of law.

In separate legal actions on Wednesday, Mayor Luke Ravenstahl, who is not seeking re-election, filed suit to eliminate UPMC's city payroll tax exemption. A separate filing challenges the tax-exempt status of UPMC's 150 city properties. Those exemptions are valued at as much as $20 million annually for the city and $200 million annually statewide.

The profit-motive looms large at UPMC, the city claims, citing service reductions or closures in poorer neighborhoods, lavish executive salaries and perks and an ever-expanding worldwide footprint. The nub of the lawsuits' rub is that UPMC fails to meet the state's definition of a “purely public charity,” as defined in a 2012 state Supreme Court ruling.

UPMC, Pennsylvania's largest private employer, counters that its charitable giving and uncompensated care more than offset those tax bills. And even as a nonprofit, it must compete for revenues to enable it to serve its health-care mission, revenues that are reinvested in its operations, UPMC says.

Some will argue that the cost of these lawsuits, certain to be expensive, aren't worth it. But it's past time to settle a matter that's been festering for decades and to finally define what “nonprofit” and “charity” really mean.

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