At a public hearing before Allegheny County Council on Wednesday night, scores of residents thronged the County Courthouse to testify that they believe UPMC should no longer be considered exempt from property taxes.
UPMC was there to contest that notion, reminding Council that it performs millions of dollars worth of charity work each year and employs 36,000 residents of Allegheny County alone.
The large regional health system would have to pay out tens of millions of dollars to 21 local taxing bodies if the property tax exemption were to be lifted.
At the heart of the issue is UPMC's status as a purely public charity. The health system contended that its member hospitals all classify as charitable nonprofit institutions, which are exempt from taxes by state law. However, community members said UPMC's multi-million dollar yearly surpluses and its business strategies remind them more of a large corporation.
"What would the seven Sisters of Mercy, who started Pittsburgh's first hospital, Mercy Hospital, think if they heard UPMC charges more for care than any other medical center in the region?" asked Rev. David Thornton of the Pittsburgh Interfaith Impact Network.
Allegheny County school districts desperately need the UPMC property tax revenue that's currently being waived, according to University of Pittsburgh women's studies professor Jessie Ramey.
"UPMC calls itself a public charity and exempts itself from paying taxes, the very taxes our schools depend on to survive," said Ramey. "Yet, UPMC gobbles up property all over Allegheny County, opens branches all over the world, and behaves like a big-money global corporation. Meanwhile, the 42 school districts right here in our county are struggling like never before."
One speaker also referenced the insurance debate between Highmark and UPMC, saying that a purely public charity should not charge out-of-network rates to Highmark members.
On the other side, UPMC Chief Legal Officer Tom McGough said the vast majority of UPMC's tax-exempt property is owned by its member hospitals, who perform charity work, train doctors and nurses, employ residents, and sponsor community initiatives like the Pittsburgh Promise. To close his remarks, McGough said UPMC doesn't want to be singled out.
"We're willing to work with whatever system of property taxation or any taxation that the county or commonwealth might enact," said McGough. "We ask only that our facilities, and particularly our hospitals, be treated no differently than other nonprofit hospitals and health systems."
More than 80 speakers had signed up to testify in advance of the public hearing. Council Member John DeFazio said the matter would continue in committee meetings, where Council would decide on a course of action.