Committee Looks at Impact of Tax-Exempt Property on Municipalities
Harrisburg – The Legislative Budget and Finance Committee, chaired by Sen. John Pippy (R-37), gathered experts Wednesday to discuss the impact tax-exempt properties have on the fiscal status of Pennsylvania municipalities.
The committee presented details of a previously released report entitled "Tax-Exempt Property and Municipal Fiscal Status," and heard reaction from a panel of municipal and nonprofit organizations.
"As the former Chairman of the Senate Housing and Urban Affairs Committee, I’ve heard many concerns from cities and urban areas about tax-exempt properties and their impact on tax revenue and long-term growth," said Pippy. "The Legislative Budget and Finance Committee has produced a report detailing the issue. Today we begin the process of developing an approach that strikes a better balance between the benefits of making certain community properties tax-exempt with the costs of such designations."
The panel heard from LBFC Project Manager Maryann Nardone, who discussed the report; James Redmond of the Hospital and Healthsystem Association of Pennsylvania; Paul Supowitz of the University of Pittsburgh; and Rick Vilello of the Pennsylvania League of Cities and Municipalities. It also received written testimony from David Ross of the Pennsylvania association of nonprofit organizations.
In Pennsylvania, counties are responsible for real property assessments. Since they do not have standard ways in which they define and record tax-exempt property, it is not possible to assign a value to tax-exempt properties in Pennsylvania.
However, in all but one of the 11 Pennsylvania fiscally distressed municipalities reviewed in the LBFC report, local governments (county, municipal, and public schools) accounted for the largest share of tax-exempt property. After local government structures, churches tend to account for the next highest share of tax-exempt property.
Senator Pippy noted that many tax-exempt properties, such as the University of Pittsburgh, make voluntary payments to communities in lieu of taxes.
"While we recognize there is no uniformity when it comes to these payments, we also recognize that not all nonprofits are alike," the Senator said. "These tax-exempt entities provide a valuable service and economic engine for growth and development in the Commonwealth. While finding a solution for our distressed municipalities is essential, any decision impacting tax exempt entities has to be reviewed."
The Senator noted that the issue will be the subject of future hearings.
The committee presented details of a previously released report entitled "Tax-Exempt Property and Municipal Fiscal Status," and heard reaction from a panel of municipal and nonprofit organizations.
"As the former Chairman of the Senate Housing and Urban Affairs Committee, I’ve heard many concerns from cities and urban areas about tax-exempt properties and their impact on tax revenue and long-term growth," said Pippy. "The Legislative Budget and Finance Committee has produced a report detailing the issue. Today we begin the process of developing an approach that strikes a better balance between the benefits of making certain community properties tax-exempt with the costs of such designations."
The panel heard from LBFC Project Manager Maryann Nardone, who discussed the report; James Redmond of the Hospital and Healthsystem Association of Pennsylvania; Paul Supowitz of the University of Pittsburgh; and Rick Vilello of the Pennsylvania League of Cities and Municipalities. It also received written testimony from David Ross of the Pennsylvania association of nonprofit organizations.
In Pennsylvania, counties are responsible for real property assessments. Since they do not have standard ways in which they define and record tax-exempt property, it is not possible to assign a value to tax-exempt properties in Pennsylvania.
However, in all but one of the 11 Pennsylvania fiscally distressed municipalities reviewed in the LBFC report, local governments (county, municipal, and public schools) accounted for the largest share of tax-exempt property. After local government structures, churches tend to account for the next highest share of tax-exempt property.
Senator Pippy noted that many tax-exempt properties, such as the University of Pittsburgh, make voluntary payments to communities in lieu of taxes.
"While we recognize there is no uniformity when it comes to these payments, we also recognize that not all nonprofits are alike," the Senator said. "These tax-exempt entities provide a valuable service and economic engine for growth and development in the Commonwealth. While finding a solution for our distressed municipalities is essential, any decision impacting tax exempt entities has to be reviewed."
The Senator noted that the issue will be the subject of future hearings.
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