Pittsburgh Post-Gazette: Should UPMC Be Tax-Exempt?

The University of Pittsburgh Medical Center is one of the largest health systems in the country and a healthcare behemoth within Pittsburgh. However, a four-part series from the Pittsburgh Post-Gazette examines UPMC's real estate portfolio and whether it should still receive its tax exemption.

UPMC owns roughly 656 acres, worth roughly $1.6 billion, and 86 percent of it is exempt from taxes. The properties that UPMC does pay taxes on are unique agreements with certain townships throughout the county.

In total, Allegheny County has about $16.7 billion of tax-exempt land, and UPMC's property accounts for 8 percent of that. Since UPMC is a non-profit public charity, it avoids paying $42 million in annual property taxes, according to the report.

Many local municipalities that are struggling for revenue have looked to UPMC as a source that could contribute more to the public coffers, beyond just the cost of charity care.

"The reality is it's not going to put them out of business," Pennsylvania Sen. Wayne Fontana (D-Brookline) said in the report. "If you have $1.6 billion of property in Allegheny County, my goodness, and you're making $500 million of profit, and you're [paying] large salaries, it's hard to imagine you can't pay something towards it on a consistent basis."

However, UPMC officials said property is only a small portion of what UPMC provides in terms of community benefits, and other initiatives such as investments in equipment help spur economic growth.

"UPMC's mission is to provide the community with superb healthcare while at the same time driving the local economy, which the record clearly indicates we've done, and will continue to do, exceedingly well," said Paul Wood, UPMC spokesperson, in the report.

The Post-Gazette's reports come amidst a fresh wave of criticism over the tax-exempt statuses of non-profit hospitals and health systems. South Carolina, Illinois and California have also seriously questioned whether non-profit healthcare organizations should be free from paying property taxes.

More Articles on UPMC:

UPMC Lures Infectious Disease Associates Away From West Penn

Highmark Unveils New Health Plan With Limited UPMC Hospitals, Physicians

UPMC's Net Income Falls 70% in FY 2012

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