Tax Day is around the corner, and some Pittsburghers think that UPMC is not paying its fair share.
Demonstrators gathered outside the City-County Building in downtown Pittsburgh on Thursday morning to urge Mayor Ed Gainey to challenge the tax-exempt status of Pittsburgh properties owned by UPMC, the state’s largest hospital system and non-governmental employer.
In January, the Gainey administration announced a citywide review of tax-exempt properties to determine whether they should be added to the tax rolls. A city spokesperson thanked the activists and promised that city staff are working hard to ensure equity in property taxes.
While the city says it is not singling out any one nonprofit, activist groups — such as Pittsburgh United and the Debt Collective — are urging Gainey to take a hard look at whether UPMC meets the criteria of a purely public charity. Citing patients’ medical debt and large executive salaries, they argue that UPMC is a charity in name only, and that it exploits its tax-exempt status to amass profits and doll out large executive salaries at the expense of the community.
Lindsey Muniak, an organizer with the Debt Collective, notes that many Pittsburghers owe UPMC large sums of money for medical care: “Shame on a health care system that put so many of us into this position.”
The tax-exempt status of nonprofits has long been a point of contention in the City of Pittsburgh, where these organizations own nearly 20% of the property. Out of all land held by nonprofits in Pittsburgh, UPMC has more than a quarter — the largest share out of the city’s public charities — valued at $1.7 billion. If the medical system were to have paid taxes in 2021, the report says Pittsburgh’s coffers would have been $13.9 million richer.
“That’s a ton of money … and that’s money that UPMC owes,” said Pittsburgh city council member Barb Warwick, who says these funds could be used to repair rec centers, create more programming for kids and seniors, tear down blighted properties, and improve roads.
Uphill battle
If Gainey decides to take on UPMC (or the city’s other large nonprofits, including Allegheny Health Network and the University of Pittsburgh) he faces a fierce fight. But there is recent precedent to suggest a legal path to forcing the hospital system to pay taxes.
A hospital system in the southeastern corner of the state lost its tax-exempt status this month after the Pottstown School District successfully argued that Tower Health did not meet the standards of a purely public charity. Superintendent Stephen Rodriguez told Spotlight PA that as a result of the Commonwealth Court ruling, there’s an additional $900,000 from Tower Health to his district’s budget which will allow him to hire 10 or 12 more teachers.
Harold Grant with the Pittsburgh Federation of Teachers says the city’s public schools could similarly benefit if UPMC paid property taxes. In addition to more instructors and paraprofessionals, he says the district’s infrastructure is getting old and rundown. “We would need more money to make changes necessary to make it a 21st Century school district.”
UPMC declined to comment.
