I had a lengthy conversation with my GOP state senator's senior Harrisburg staffer about SB4 (printer's number 168. According to the official Senate website as of yesterday, Jan. 23, the bill had been referred to the state senate Finance Committee on Jan. 20th. The staffer informed me that the Finance Committee already voted it out as of the 23rd - so it is being fast-tracked. The bill proposes a change to the state constitution which will allow the general assembly to pass laws saying which non-profits qualify as (untaxable) "purely public charities." At present, that is done by the State Supreme Court in it's role of interpreting the state constitution.
I'll get into the details and background of the bill below, but would remind you all that the General Assembly has to pass proposed legislation which requires a change to the state constitution, in two successive sessions. It has already passed in the last session, so passage of this current bill by both chambers would (absent a gubernatorial veto or same being overridden) get this on the ballot - probably the May 19th primary - which being an off year and a primary, will have a depressingly lower than the already abysmally low voter turnout.
The GOP staffer attempted to justify the Senator's support of this bill by saying the Senator was concerned that the Supreme Court was legislating from the bench. I responded by pointing out that the Supreme Court's 5 point test for what constituted a purely public charity was quite straight-forward, whereas the language of SB 4 was suspiciously vague and if passed, guaranteed to flush out lobbyists with fat checks to "fine-tune" the legislation with specific language to benefit the like of international medical corporation UPMC. I stated I preferred legislation from the bench to legislation from lobbyists' checkbooks. I also pointed out the extreme unpopularity in Allegheny County of UPMC and its exorbitantly paid ($6-7 million per year) CEO, Jeff Romoff, and pointed out that the Senator would be forever tied to Romoff & UPMC in the public view should he support this bill.
I asked him if he knew who was behind the mailings opposing SB4, and he replied with some frustration: "We've been wondering about that too. We think it's the unions."
The current standard for determining whether an orgnization is a purely public charity is set out in the 1985 ruling in Hospital Utilization Project v. Commonwealth - hence the acronym HUP.
As detailed on the Fair Share website,
ALL“purely public” charities in Pennsylvania must meet EACH and EVERY SINGLE one of these 5 requirements in ordered to be categorized as such:
1. Advances a CHARITABLE purpose
2. Donates or renders GRATUITOUSLY a substantial portion of its services
3. BENEFITS a substantial and indefinite class of persons who are LEGITIMATE subjects of CHARITY
4. Relieves the government of some of its BURDEN
5. Operates entirely FREE from private profit motive
*Hospital Utilization Project v. Commonwealth, 487 A.2d 1306, 1317 (Pa. 1985).
In practice, at least in my county, municipal/taxing bodies (local, county, school districts) can negotiate with alleged "non-profits" such as international profit-making UPMC, regarding how much the non-profits will agree to pay in lieu of being fully taxed.
Here's an excellent article from the Trib-Review detailing both sides of the argument:
Pittsburgh Mayor Luke Ravenstahl said city taxpayers should not subsidize the $10 billion hospital system that has fueled UPMC's rise as Pennsylvania's largest employer and the region's richest nonprofit organization.
Ravenstahl on Wednesday filed a lawsuit seeking to eliminate UPMC's exemption from paying the city's payroll tax and separately challenged the tax-exempt status of UPMC's 150 properties in the city.
“We know that UPMC is no doubt prepared to spend a lot of those billions of dollars to fight what we're trying to do,” Ravenstahl said during a news conference, joined by fellow Democrats and Service Employees International Union members who urged him to challenge UPMC. “It's kind of David versus the Goliath.”
Read more:
http://triblive.com/news/adminpage/3696701-74/tax-upmc-exempt#ixzz3Pk0FszHe
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Really, you all need to read this entire article to understand the situation. And kudos to the Trib-Review for a thorough article (which I believe comes down as anti-UPMC).
Bottom line: I believe UPMC has already greased the wheels of the majority of state legislators - particularly the Republicans, and this Senate Bill and a sister bill in the House will sail through in a matter of weeks - then go to a conference committee of the 2 chambers to reconcile any language differences, get a final vote from both chambers and land on the governor's desk. Wolf can veto and then the question is whether UPMC has bribed enough legislators to override a veto (which UPMC can easily afford to do - our PA legislators come pretty cheap - a couple of thousand per legislator would be pocket change to UPMC). However, should this bill get onto the ballot, and if whatever deep pocket is sending out multiple high-gloss, expensive mailings (I've gotten four of them) chooses to continue its opposition, I think the public will defeat it. If it should pass, we can look forward to UPMC going from paying property tax on some 51% of it's property (as the curent agreement w/Pittsburgh provides) to paying zero tax at all. Because megalomaniac Jeff Romoff is that greedy.
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