Thursday, December 27, 2007

UPMC Drops City Side Agreement for Pittsburgh Promise

I'm on vacation this week, so I first saw this story online from the AP on Wednesday night. UPMC has dropped its condition that the city council approve a side agreement before it keeps its commitment to contribute to the Pittsburgh Promise.

You can read UPMC's news release on its website, as well as its letter to the Pittsburgh Foundation.

I've still not received a copy of the now-discarded proposed city agreement. The news release indicates that the side agreement approved by the Pittsburgh School Board still stands. The school district says that agreement will:

• "Credit UPMC’s contributions to The Pittsburgh Promise for that year against any
potential real estate tax obligation to the District; or,

• Acknowledge UPMC’s right to reduce its contribution to The Pittsburgh Promise for that year commensurate with the amount of the tax obligation to the District. "

If, in what they describe as "the unlikely event that future State legislation permits the District to levy real estate taxes on UPMC and its affiliates", it UPMC will still get what appears to be a dollar-for-dollar credit for the Pittsburgh Promise against any new school district tax. That would be either a credit against any potential "real estate tax obligation" or a reduction in UPMC's contribution to the Promise.

Previously, some blog readers had questioned whether the now-defunct proposed city side deal combined with the school district agreement would have amounted to a two-for-one credit. I've not heard that question addressed, but it is now moot. The school district's potential one dollar-for-one dollar credit to UPMC still stands.

Here are links to:

• the Pittsburgh Public Schools news release,

the resolution approved by the school board,

the formal agreement itself between UPMC and the school district.

The agreement contains a clause that says if such a school district tax credit is determined to be illegal, UPMC will still be able to reduce its contributions to the Pittsburgh Promise, if it's subject to a new tax by the school district.

"9. Legality of this Type of Agreement. In the event that any state or federal court issues a final decision which declares unlawful agreements which are of the nature of this Agreement, this Agreement shall terminate and be unenforceable as of the effective date of said decision, but the Grant Agreement between UPMC and The Pittsburgh Foundation shall not terminate or be unenforceable. "


1 comment:

Char said...

Has it been verified that council could not give UPMC tax credits because they would be inequitably applied and therefore unconstitutional and therefore illegal? If so, how can the school board's grant of those same illegal tax credits stand?