Public questions hospital property tax exemptions

Adding to scrutiny of nonprofit hospital tax exemptions, the Pittsburgh Post-Gazette reported that even though UPMC is the largest property owner by value in Allegheny County, Pa., its nonprofit status makes 86 percent of its property tax-free.

The health system owns $1.6 billion worth of property, but as a nonprofit, it avoids $42 million in property taxes to municipalities, school districts and the county, the article noted.

Much of that property came with a hefty price tag. Its newest hospital sits on land that cost $18.75 million, twice the price the previous owner paid. UPMC also spent $10 million for a former Ford Motor Company building, which was valued at less than half that in 2002, and remains vacant, noted the Post-Gazette.

With such figures, the public is questioning whether nonprofits should be allowed to act like "big-money corporations" while paying no property taxes, especially in struggling areas.

For example, Palm Beach County, Fla., loses $37.4 million in property tax revenue a year, thanks to tax exemptions given to nonprofit organizations, including hospitals, charities and churches, noted a Palm Beach Post opinion piece. And over in Rhode Island, Providence could file Chapter 9 if its hospitals don't start contributing more to the budget.

Meanwhile, as Winston-Salem, N.C., prepares to face potential $20 million property tax gap by 2014, city and county lawmakers are considering asking health systems to give up some of their tax exemptions.

But some nonprofit providers might not be able to deliver needed care to poor and uninsured populations if they had to pay taxes, noted the Palm Beach Post.

For more:
- read the Post-Gazette article
- here's the Palm Beach Post op-ed