HARRISBURG, JAN. 5, 2010 — State Sen. Wayne D. Fontana and Rep. Timothy J. Solobay have introduced legislation that would allow for the imposition of an “essential services fee” on tax-exempt organizations that own property within a municipality.
The lawmakers said Senate Bill 1175 (SB 1175) and House Bill 2191 (HB 2191) would likely be amended considerably before passage, but called the legislation “a good starting point” for a dialogue at the state level about the impact of tax-exempt real property on the fiscal health of municipalities.
“Communities across the state continue to struggle with this issue,” Fontana (D-Brookline) said. “While we do not want to harm the non-profits, we also need to ensure that their growing property ownership doesn’t harm the municipality or its taxpayers. This bill is far from perfect, but it is a starting place to talk with all parties about how to address this growing issue.”
While municipalities could continue to rely on existing voluntary agreements, the Fontana bill would also give them the option of imposing a fee based on total square footage of properties, and/or establishing a limited real estate tax for properties owned by charitable institutions.
Solobay (D-Canonsburg) added, “These two bills would allow cities and municipalities to generate revenues from tax-exempt real properties, which would help keep property taxes down for all residents. I understand that charitable organizations are struggling with declining revenue, but so are their host communities. And as the number of tax exempt properties continue to grow – as is happening in the city of Washington and Washington County — the burden is falling more and more on homeowners and for-profit businesses to fund municipal important local services such as police and fire protection that are available to all.”
Fontana said the state Senate Democratic Policy Committee has scheduled a hearing on the legislation for Tuesday, January 12 at 10:30 a.m. in the Pittsburgh Federation of Teachers’ Hall on the South Side. The committee expects to hear from municipalities, including the City of Pittsburgh, the City of Washington, Allegheny County, Washington County, non-profit organizations, institutions of higher learning and other large non-profits. Fontana and Solobay are both expected to participate.