Tuesday, December 18, 2007

UPMC's "Essential Condition" On Pittsburgh Promise

[The full text of the bill appears at the end of this post]

UPMC made a commitment to help fund the Pittsburgh Promise college scholarship program for city school students. Mayor Luke Ravenstahl wants Pittsburgh taxpayers to make a promise to UPMC in return.

The mayor wants City Council to give UPMC up to $100 million in potential tax credits to be able to write off its Pittsburgh Promise contributions. UPMC would get the tax credits should the state ever give Pittsburgh the power to tax large nonprofit corporations.

UPMC spokesman Frank Raczkiewicz e-mailed this statement in response to my questions:

"The side agreement, which in fact is an essential condition of our agreement to provide $100 million, provides that

1. The City and School will continue to recognize UPMC’s exempt status during the 10 year period. The City and School are not prevented from seeking taxes for any properties of UPMC that are not used in activities related to UPMC’s charitable mission.

2. If there is a change in tax law the effect of which is to treat UPMC as taxable for City or School District purposes, then UPMC will get an offset with respect to its donation to the Pittsburgh Promise. We are willing to donate $100 million, but we don’t want to pay $100 million and also have new taxes of $100 million.

3. The side agreement does not give us new tax breaks and it doesn’t reduce any taxes we may currently pay."

Mayor Ravenstahl was not available for comment. His spokeswoman Alecia Sirk says that "in event of changes in tax law or city leadership" the agreement is intended to "make sure the Pittsburgh Promise remains a top priority".

Some city Council members expressed surprise when the mayor's office submitted the bill Tuesday and asked that it be put on a fast track for action with just days left before its current lame duck session ends. The legislation comes up for discussion and a possible vote Tuesday.



Char said...

"The side agreement does not give us new tax breaks and it doesn’t reduce any taxes we may currently pay."

I just heard Luke (KDKA) confirm that it DOES reduce current taxes. Or, "in lieu of" taxes. Whatever UPMC currently contributes to the city's operating budget will stop. Those monies will instead go to the Promise as part of the $10 million. Leaving a hole in our operating budget.

Felix Dzerzhinsky said...

This latest from UPMC is truly beyond the pale. They have been basking in the PR for nearly two weeks, and now this is an "essential condition" of their agreement. This kind of arrogance tops even the way they behave at the end of every quarter when their financial numbers come out and they have sky-high profits yet again. ("Yeh, we make a lot of money, and whatcha gonna do about it, punk?")