City of Pittsburgh targets tax exempt status of nonprofits

The City of Pittsburgh is ramping up efforts to get some nonprofits to pay their fair share.

Mayor Ed Gainey announced plans Wednesday to challenge the tax-exempt status of more than 100 properties, which he believes are not purely public charities, under state guidelines.

“Our list today includes properties owned by some of the biggest and largest nonprofits here in Pittsburgh, including UPMC, AHN and our universities,” said Gainey.

Mayor Ed Gainey, clearly taking aim at some of the city’s largest nonprofits, announced plans to challenge their tax-exempt status to get them to pay up.

“If you do not meet as defined by the supreme court, that you shall pay your fair share for the paving of the roads in front of your hospitals, to the EMS crews that bring patients to your doors, for the police and fire teams that help keep you and your students safe,” said Gainey.

Under state guidelines, purely public charities must donate a portion of their services, benefit people in need and operate free from private profit motive.

A spokesman for UPMC fired back in a statement to Channel 11.

“The parcels being challenged that are located on the campuses of UPMC Children’s, UPMC Magee-Womens, UPMC Mercy, UPMC Presby, Shadyside and UPMC Montefiore clearly support the charitable mission of those hospitals. The mayor knows he has UPMC’s commitment to participate in a program that’s fair and equitable and includes the other ‘big five’ nonprofits,” said Paul Wood, a spokesman for UPMC.

If added to the tax rolls, the 104 properties, including some owned by Allegheny Health Network, the University of Pittsburgh, Carnegie Mellon University and Duquesne University, would generate $6.5 million for the city.

The city solicitor also addressed concerns that some of the larger nonprofits, like UPMC, should be left alone because they employ so many people.

“We are grateful to them for employing people just as we are grateful to PNC and Giant Eagle. Those corporations also hire a lot of people in Pittsburgh. They are good cooperative citizens. They also own property here and they pay the taxes on the parcels they own,” said Krysia Kubiak, city of Pittsburgh solicitor.

Allegheny Health Network also released a statement on the mayor’s efforts.

“Highmark Health and AHN officials meet regularly with community leaders, including the mayor, to discuss public health issues and opportunities to improve the health and wellbeing of the people and communities we collectively serve. We are fully committed to meeting our tax obligations, and in fact our organization pays hundreds of millions in taxes every year. Highmark Health and AHN, however, also have a long history of going above and beyond tax obligations to benefit and strengthen the communities we serve. There is no better example than the $1.4 billion we invested to help our communities navigate and respond to the COVID pandemic, the charity care we routinely provide, the many free health screening events that we hold every month, and the work that our center for inclusion health and street medicine teams do to provide care to the homeless and other marginalized populations, just to name a few. We make such investments in our communities not because it’s required, but because it’s the right thing to do. That philosophy and mission will continue to serve as our guidepost for all future deliberations about how we can help create remarkable health experiences and improve the overall quality of life in our communities,” Dan Laurent, a spokesman for Allegheny Health Network.

The city began challenging properties last year.

They won 12 out of 27 cases and added $100,000 in tax revenue to the city annually.

But it is costing the city at least $400,000 in outside legal fees to fight the cases in court.

The city solicitor said she’s confident they’ll make that up and much more with the annual payments.

She said she’s confident the city will win cases in the upcoming challenges.

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