Recently, our city’s financial overseers released a five-year plan aimed toward greater stability. While I applaud the recovery officers’ ongoing effort toward a path of reasonable, financial sustainability for Pittsburgh, I have serious reservations about a provision in this plan that would raise property taxes.
Some of the reaction to the recommendations in the Act 47 plan in recent days has been that more needs to be done at the state level to help address the city’s budget woes, including calls for allowing a commuter tax. While I agree that the state should seek legislative solutions that could help the city, I disagree with imposing new taxes directly upon area individuals. As the mayor and city council consider options, they must look to reliable and sustainable funding mechanisms. One better option for moving forward is through legislation that I authored in the Senate.
My proposal (Senate Bill 143) would require non-profit organizations to pay taxes on the assessed value of their land. An exemption for the first $200,000 of land value is included in the legislation to protect smaller organizations such as health clinics, charitable organizations and churches to allow them to continue their missions. However, larger companies have been achieving record profits year after year while the city is suffering substantial revenue losses. We should examine alternatives such as SB 143 further before we wade into “solutions” that would only serve to harm those who are struggling the most among us.
To put things into perspective, let’s examine some numbers. The total worth of all tax-exempt land in Pittsburgh is over $2.4 billion dollars. By going with the total worth of an organization’s real estate, non-profit-owned land in Pittsburgh would have an estimated worth of nearly $526 million under the guidelines set forth in SB 143. Under the proposal, a combined city-school district-county tax rate on that real estate could help garner an estimated $166 million.
I am open to suggestions on ways to improve the bill. For example, the exemption on assessed land value could be raised above $200,000. In a scenario where we increase the amount to $500,000, approximately $127 million in revenue could be gained. If we were to amend the legislation to tax on a per parcel basis rather than on the total assessed land value, there would be a slight decrease in revenue generated, but it would still garner a substantial amount. Keeping with an exemption for the first $200,000 in land value, a per parcel formula would provide an estimated $125 million. Again raising that threshold to $500,000, an estimated $111 million could be generated.
Unfortunately, I have gathered little support in Harrisburg for my proposal even though it seems like common sense to enact a statewide law that would obligate large non-profit corporations to pay their fair share. After all, they too benefit from the services that our municipalities provide each and every day — just like our taxpaying homeowners.
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