Pittsburgh may have been built by the high-profit steel, coal, and glass industries, but today its economy is driven by high-value nonprofits.
There are higher education institutions. The University of Pittsburgh is one of the largest in a state packed with post-secondary schools. Carnegie Mellon University is one of the most respected in the world in fields like computer science and robotics. Duquesne University is one of the oldest Catholic colleges in Pennsylvania.
Tens of thousands of students attend nonprofit, parochial, or city government-affiliated schools. Among Pitt, Carnegie Mellon, and Duquesne students alone, the number exceeds 43,000, each paying thousands in tuition.
Then there are the hospitals. UPMC is the largest health care system in the state. UPMC Shadyside is one of the largest hospitals in the state. This is just one of UPMC’s Pittsburgh facilities. Highmark’s Allegheny Health Network also operates in the city. Millions of bills are generated by them through hospital stays and outpatient procedures.
From students to patients, Pittsburgh’s economy runs on these engines. City coffers, however, do not collect nonprofit property taxes from for-profit buildings. This has been a sticking point for years, not just for Pittsburgh, but for other municipalities and counties that are home to large amounts of nonprofit real estate.
Pittsburgh City Councilman Ricky Burgess has proposed a 1% tax on tuition and medical costs, with the proceeds earmarked for infrastructure. He called it “very modest,” but with the number of people affected, it could exceed $50 million.
That might be small compared to Pitt’s $4 billion endowment or UPMC’s record earnings in 2021, but someone studying social work at Pitt would have to pay about $200 a year in taxes on top of loans. students. Medical expenses are often cited as one of the main causes of bankruptcy. Is adding hundreds of additional taxes a way of serving the population?
No. Especially since the proposal targets recipients of services provided by nonprofits simply because nonprofits themselves cannot be taxed legally.
“The bill itself is troublesome,” City Comptroller Michael Lamb said. “The end result must be a meaningful contribution from nonprofits, not their students or patients.”
Although Burgess’ proposal is ridiculous and heartless, it indicates a desperate need. Nonprofits and municipalities need to negotiate fair and mutually agreeable deals to make up for what is not provided by taxes, because the alternative is for the government to find new ways to extract money. money to those who can least afford it.