Ross limited on tax-exempt property, but officials against bill
As much as 67 percent of the property in some Allegheny County municipalities is tax-exempt, and the Ross commissioners are worried that a proposed state law could hamper the ability of local governments to get reimbursed for the services they provide nonprofit groups.
Auditor General Eugene DePasquale held a public hearing on March 12 in downtown Pittsburgh on Senate Bill 4, which would give the state rather than the courts the authority to define what group is a purely public charity and, therefore, able to avoid paying certain taxes, such as the property tax. Officials of some communities with a lot of tax-exempt property worry that the amendment, if it becomes law, could reduce their ability to negotiate deals called a payment in lieu of taxes with nonprofit groups.
The state Senate passed the bill in February, and the state House, also controlled by Republicans, must pass it before it can appear on a statewide ballot in November.
“For (the Legislature) to basically act as the king in this whole decision on the status of nonprofits is outrageous,” said Dan DeMarco, the Ross commissioner who introduced the resolution. “To take that ability away is threatening to the financial stability of a lot of municipalities.”
Ross commissioners approved the resolution opposing Senate Bill 4 although only 9 percent of the township's land is tax-exempt.
A recent report by the Allegheny Institute for Public Policy shows that the amount of tax-exempt property in Allegheny County ranges from zero in Pennsbury to 67 percent in Findlay. The average amount of tax-exempt property in a community here is 25 percent.
“I want my taxable value to be growing,” said Eric Montarti, senior policy analyst for the institute, a Mt. Lebanon-based think tank. “You want to minimize your percentage of exempt. Some communities would love to have a state-owned university within their borders. Another community would say ‘no, I don't want the problems.'”
Many Republican legislators like Senate Bill 4 because they say it will clear up confusion over a 2012 state Supreme Court case and protect nonprofits from excessive litigation. Millions of dollars worth of payments to local governments is at stake.
Carnegie Mellon University, Highmark, the University of Pittsburgh and UPMC agreed to pay the city of Pittsburgh $2.1 million in 2014, which dropped to $830,000 this year and subsequently to cover the cost of police and fire protection and street maintenance, according to a five-year agreement. Mayor Bill Peduto has said he would like to escalate the combined contribution to $20 million.
In February, the Sewickley Council wrote state Sen. Matt Smith and state Rep. Mark Mustio and urged them to oppose Senate Bill 4.
“With 25 percent of our land tax-exempt, it doesn't mean that land doesn't need or use municipal services,” said Kevin Flannery, manager of Sewickley.
The borough has a deal with Heritage Valley Health System that pays it $30,000 a year toward the cost of eventually replacing a ladder truck for the fire department.
In Monroeville, 20 percent of the property is tax-exempt in large part because of UPMC East and Forbes Regional Hospital.
“I could see it being an issue,” said Timothy Little, manager of Monroeville. “It's all the publicity generated over UPMC and Highmark. People see their financial statements and start questioning whether they meet the (court) test” to be considered a charity.
Institutions exempt from property taxes could range from nonprofit behemoths such as UPMC and Highmark to a food pantry, homeless shelter or church. Government property also is included.
At 67 percent of its nearly $2.2 billion in property, Findlay has the highest proportion of tax-exempt property in Allegheny County. The reason is it is the home of Pittsburgh International Airport.
But Findlay manager Chris Caruso said he likes having the airport in the township's backyard. Its for-profit garages, parking lots and shops chip in to help pay its nearly $10 million annual budget. In addition, the airport has attracted six business and industrial parks to Findlay.
“It's an asset for development without a doubt,” he said. “There are companies out there that look at the airport and want to locate close to it because they can get their people in and out quicker.”
Bill Zlatos is a staff writer for Trib Total Media. He can be reached at 724-772-6353 or firstname.lastname@example.org.