Auditor General’s Report on Tax-Exempt Entities

Last week, Pennsylvania Auditor General Eugene DePasquale released a report showing tax-exempt entities have starved local municipalities, counties and school districts of $1.5 billion annually in potential property tax liability in 10 commonwealth counties.  Titled “Review of Potential Lost Revenue Due to Property Tax Exemptions,” the report displays how these institutions with purely public charity status may be taking a greater toll on our local economic climate than previously thought. 

The Auditor General’s report used 2014 data from Allegheny, Bucks, Dauphin, Erie, Lackawanna, Lehigh, Luzerne, Monroe and Montgomery counties with Beaver County providing data from 2013.  Tax-exempt status is often given to government owned properties, K-12 schools, churches, charitable organizations, hospitals, and higher educational institutions.  The auditor general’s report highlights how medical facilities alone with purely public charity designation account for almost $175 million in property tax payments lost in just these 10 counties. 

Allegheny County has missed out on the greatest amount of revenue with nearly $620 million in property taxes in part from nonprofits with tax-exempt status, far outpacing losses by the other nine counties.  This is nearly triple the $230 million lost in Montgomery County, the next highest amount in the study.  With that being said the University of Pittsburgh Medical Center (UPMC) accounts for $48 million, and $15.7 million from the Allegheny Health Network, totals 12 percent of the property taxes not collected in Allegheny County.

Nonprofits and public charity status has been a contentious issue for some time now, especially in the Pittsburgh region where these entities play a significant role.  Understanding the complexity of this issue and the need to find a balance between enabling these organizations to continue to provide a charitable service while at the same time contributing to our communities, I plan to re-introduce legislation that would require nonprofit organizations that own real property to pay some taxes. 

Specifically, my bill would require these nonprofits to pay taxes on the assessed value of the land only (not building), with the first $500,000 of land value being exempt from taxation to protect smaller nonprofits.  The exemption would apply to all property owned by the organization, not per parcel. 

While no one is disputing the good that nonprofits do in terms of the jobs they provide and the economic investment they have garnered, the release of this special report gives the commonwealth just a glimpse of the economic reality many counties are facing and how many millions of dollars local governments are missing out on in terms of possible revenue.  Pittsburgh and all the other counties across Pennsylvania deserve a reliable and predictable nonprofit tax plan to help sustain the growth many regions are experiencing or will be in the near future and this is the perfect time to start a conversation of where to go from here in terms of purely public charity status and tax exemption. 

Offices Closed

All Senate offices will be closed on Thursday, January 1st in observance of the New Year’s holiday.  I wish everyone a very happy and safe New Year!

Brookline Open House – Meet Your Representatives

As a result of the constitutionally-mandated reapportionment of all Senate and House districts, there have been changes to districts all across the commonwealth.  While I continue to represent the entire 19th ward in the city of Pittsburgh in the state Senate, there are now three state Representatives that represent parts of the 19th ward.  Representatives Dan Deasy, Dan Miller and Harry Readshaw, all now represent portions of the 19th ward which includes the neighborhoods of Brookline, Beechview, Duquesne Heights and Mt. Washington.

On Saturday, January 10th, from 10 a.m. – noon, I will be hosting an Open House for Representatives Deasy, Miller and Readshaw in my Brookline office, so residents of the 19th ward can come and meet their new representatives.  My Brookline office is located at 932 Brookline Boulevard.

Property Tax/Rent Rebate Deadline Tomorrow

I want to remind everyone that the deadline to file for a property tax or rent rebate through the PA Property Tax/Rent Rebate Program is December 31st.  Property tax/rent rebate applications must be postmarked no later than that day to be considered.

If you received a rebate last year, you should have received an application in the mail.  If you did not receive an application, or did not apply last year and wish to apply this year, the applications can be obtained from any of my district offices and my staff would be happy to assist you in preparing your application.

The Property Tax/Rent Rebate Program benefits eligible Pennsylvanians age 65 and over; widows and widowers age 50 and over; and people with disabilities age 18 and over.  Act 156 of 2014, which I was happy to support, raises the income limits for seniors receiving a Social Security cost-of-living adjustment (COLA), making more seniors eligible for the program.  Now any homeowner with an annual income up to $35,298 for 2013 and who collects Social Security and received a rebate will continue to qualify.  The same goes for renters with an annual income up to $15,128.

The Pennsylvania Department of Revenue will automatically review previous claim year 2013 applications where the rebate was denied for income in excess of $35,000 for homeowners and $15,000 for renters.  In the cases where a homeowner or renter’s overage is due only to a Social Security COLA, the department will re-open, process and then pay these claims.  It has been estimated that approximately 6,000 seniors will now be protected from losing their rebate this fiscal year because of passage of Act 156, and up to nearly 9,000 by the 2016-17 fiscal year.

FAFSA

As the Vice-Chair of the Pennsylvania Higher Education Assistance Agency (PHEAA), I want to encourage high school seniors and their families to prepare to complete the FAFSA (Free Application for Federal Student Aid) as soon as possible after January 1st.  The FAFSA is the federal form that all students must submit to determine eligibility for most forms of need-based financial assistance including the Pennsylvania State Grant, Federal Pell Grant, work-study programs, PA Targeted Industry Program (PA-TIP), various scholarships, some school-based aid, and federal student loans.  The only way to find out if you qualify for awards is to complete and submit the FAFSA.  Students who are eligible for awards can reduce their family’s out-of-pocket expenses and make the cost of higher education more manageable.

Now is the time to get a jump on the application process by preparing, before sitting down to complete the FAFSA application.  Students and families will be able to complete the FAFSA online at www.fafsa.ed.gov beginning January 1st, and will need the following information when beginning the application process:

• Social Security Numbers
• Student’s driver’s license
• Alien registration number, if not a U.S. citizen
• W-2 forms
• Records of untaxed income received, including workers’ compensation, child support, payments to tax-deferred pension and savings plans, etc.
• Federal income tax return (1040, 1040A, 1040EZ)
• Current bank statements and records of stocks, bonds, and other investments

The FAFSA can be submitted beginning January 1st and it is better to complete and submit the FAFSA as soon as possible after that date as schools’ financial aid deadlines vary.  Once again in 2015, PHEAA will host FAFSA Completion Sessions across the commonwealth where PHEAA, in partnership with PASFAA (Pennsylvania Association of Student Financial Aid Administrators), provides free assistance to families needing assistance in completing the FAFSA.  You can click here to view a listing of scheduled FAFSA Completion Sessions.  PHEAA will continue to update this listing as more sessions are scheduled in the coming weeks.

First Night

The Pittsburgh Cultural Trust is once again producing First Night Pittsburgh on New Year’s Eve.  This year’s celebration marks the 21st anniversary of First Night Pittsburgh and the 12th as a production of the Cultural Trust.  As the largest single-day celebration in the region, First Night offers approximately 150 events at nearly 50 indoor and outdoor locations within the 14-block Cultural District.  This family-friendly event provides the city the opportunity to ring in the New Year with a bang while celebrating Pittsburgh’s many rich cultural assets.

First Night Pittsburgh kicks off at 6 p.m. on December 31st with a children’s fireworks show and concludes with the countdown to midnight, and the raising of the Future of Pittsburgh Ball at midnight, with tons of fun in between.  To view the many activities taking place during First Night and for a full schedule of events, shows and entertainment and information on all-access buttons please visit www.firstnightpgh.org.

Christmas Tree Recycling Program

The Allegheny County Department of Parks is offering its annual Christmas Tree Recycling Program through January 17th.  County residents can drop off their Christmas trees from dawn to dusk at all nine regional parks.  All lights, decorations, tinsel and stands must be removed from trees prior to drop off.  All trees received will be mulched and used in the County’s nine regional parks.  Trees may be dropped off at the following locations in each of the parks:

• Boyce Park – parking lot by the wave pool
• Deer Lakes – parking lot by Veterans Shelter
• Harrison Hills – parking lot at the intersection of Chipmunk and Cottontail Drives
• Hartwood Acres – parking lot at the mansion
• North Park – parking lot at the swimming pool
• Round Hill – parking lot between Meadow and Alfalfa Shelters
• Settler’s Cabin – parking lot by the wave pool
• South Park – parking lot at the swimming pool
• White Oak – parking lot by Poplar Shelter

Fontana Fact

A recent survey suggests roughly half of all Americans make some type of New Year Resolution each year.  The five most popular New Year Resolutions are to lose weight, get better organized, save more money, stay fit and quit smoking.  About 46 percent of people who make a resolution are successful after 26 weeks.