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State Legislation Takes Aim at Pittsburgh’s Large Non-Profits

highmark bldg.jpg

As part of the ongoing discussion on finding new ways to tax some of Pittsburgh’s largest non-profit organization, one state lawmaker is getting the legislative ball rolling.  State Senator Jim Ferlo (D-Highland Park) is introducing a bill that would impose a new levy of .4 percent payroll preparation tax on Pittsburgh non-profits that have more than 250 employees.

“This would enable the city to maybe recoup $6 million to $10 million annually, it would end the inequity and dissension that continues to exist and the ongoing debate about the payment in lieu of tax (PILOTS) – some non-profits contribute, most don’t. I think any tax should really be uniform,” said Ferlo.

In addition to the .4 percent tax, his bill would also reduce the city’s current payroll preparation tax (PPT) on for-profits from .55 percent to .5 percent. Ferlo said the bill is an effort to get large organizations to chip in for city services, which right now for-profit businesses and residential taxpayers are paying for.

“The large non-profits certainly receive vital city services, everybody else contributes to that tax base and I think it’s important that we be fair and equitable.”

Ferlo emphasizes the tax would not target smaller non-profits such as religious institutions, health and welfare agencies, or local community development groups. This is part of a larger discussion on getting some of Pittsburgh’s largest organizations to pay.

“I don’t know anybody that would argue that UPMC can’t pay their fair share, or Highmark, or West Penn Allegheny Health System, or the Central Blood Bank. These are institutions that have very large excess profits, they don’t call them profits, they call it excess revenue, but they’ve spun off for-profit business, they pay multi-million dollar salaries,” he said.

Ferlo said he is building sponsors to the measure, and expects to introduce it in the coming weeks.

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