Thursday, June 28, 2012

UPMC Not Claiming it is a "Purely Public Charity".

It wasn't that long ago that health care titan UPMC ceased using fanciful terms like "excess margin," and instead began admitting it achieves "profits".

Now, in the wake of a Pa. Supreme Court decision making clear what sorts of organizations are properly tax-exempt under the "Purely Public Charities Act", UPMC is steering clear of public officials' assertions that the health care giant is not in itself a "charity."

UPMC declined an invitation to discuss the issue at Pittsburgh city hall -- perhaps turned off by a concurrent examination of its labor relations practices. Yet even in responding to media reports about the court ruling and threatened tax-status litigation:

But in a written statement, UPMC spokeswoman Susan Manko said UPMC provided $565 million in charity care and other community benefits last year and "any sort of new tax scheme would certainly result in less (not more) monies for our region."

UPMC also pays more than $55 million in property, parking, business taxes and other contributions to local, county and state governments. Since 1989, UPMC has provided contributions totaling more than $40 million to city and county governments and school districts. (PBT, Chris B. Mamula)

UPMC is electing to make a practical argument. It is not saying that it is a charity, but rather that it is charitable. Crucially, it has yet to represent that it would be able to pass the court's test to continue being considered exempt from certain taxes.

This may be indicative that prospective litigation against all the major health care nonprofits' tax statuses, if indeed pursued forthrightly, would be likely to bear fruit.


1) When you receive your County property tax bill, respond only with a letter explaining that you already pay income taxes and sales taxes, that you provide for your family, and are great help to your employer and your chosen industry. Inform them also of your support of community and charitable endeavors, including the Boy or Girl Scouts, the PTA, Race for the Cure, and if applicable the Pittsburgh Promise. Imply that this is far more important than paying property taxes for public safety, public transit, public education, public debt and public asphalt -- and be sure to state clearly that you plan on transforming yourself into more of a miserly, uncharitable bastard if charged with tax evasion.

2) As consumers and equitable providers of public safety, transit, education, debt and asphalt, go and get yourselves together, hire an attorney, and take the nonprofits to court on your own. Even if Pittsburgh City Council is not now merely feinting towards the permanent legal solution -- in an attempt to negotiate and be bought off cheaply with a measly couple more million in "payments in lieu of taxes" through the Pittsburgh Public Service Fund -- even then, the political makeup and intestinal fortitude of the Council may not survive through the requisite seasons of elections and expensive lobbying.

It was groups of citizen-plaintiffs which finally took down Allegheny County's inequitable and unconstitutional "base year" property tax assessment scheme, despite endless political machinations. We can support the populist rhetoric now faddish in Council Chambers, but perhaps ultimately we will have to do so also with improper, unconstitutional tax exemptions.

1 comment:

  1. BREAKING: from the Pittsburgh Business Times

    UPMC ranked top-grossing health system [yes, national rankings]