Pa. auditor general wraps constitutional amendment campaign

Written by Emily Previti/Keystone Crossroads | Apr 1, 2015 3:21 AM

Photo by Lindsay Lazarski/Keystone Crossroads

Pedestrians cross a bridge near the campuses of Carnegie Mellon University and the University of Pittsburgh. Hospitals and universities are among organizations that count as charities in Pennsylvania and, as such, don't pay property taxes

(Harrisburg) -- The state Auditor General's office has wrapped up its succession of meetings on the tax status of nonprofits.

The public information sessions were launched in advance of a possible state constitutional amendment to empower the legislature to determine which organizations qualify as purely public charities - which don't pay real estate taxes.

The push for the change, which would essentially render legal challenges to state laws moot, comes after a state Supreme Court decision favoring narrower standards for qualifying as a charity.

Pennsylvania Municipal League Executive Director Rick Schuettler says it's not necessary.

"Our concern is, why a court decision results in a constitutional amendment. If we reacted to things that way every time, there'd be a lot of constitutional amendments," Schuettler says.

Schuettler and municipal officials worry the legislature will make it easier for groups to qualify as a charity, which will further limit property tax revenue to already-struggling cities.

An estimated $1.5 billion could be generated by those properties every year, according to a report released a couple months ago by state Auditor General Eugene DePasquale.

DePasquale plans to produce another report within a month or so, this one summarizing these four public hearings and expected to include information on how some cities deal with revenue lost to tax exempt properties.

Some exempt nonprofits make voluntary payments in lieu of taxes, known as PILOTs.

DePasquale says they typically generate a fraction of the cumulative would-be tax bill of a city's exempt property owners.

"Even if you get them, you don't know if you're going to get them in the next year. What we're talking about is sustainable revenue," DePasquale says.

State Fraternal of Police Recording Secretary Joe Regan says consistency is key - particularly to the state's struggling communities.

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