Ravenstahl Challenges UPMC’s Tax-Exempt Status
PITTSBURGH (KDKA) – Headquartered in the city’s biggest building, UPMC is by far the largest employer in the region, the largest property owner in Allegheny County — and, says Mayor Luke Ravenstahl, the biggest tax scofflaw.
“It’s very clear to me that the University of Pittsburgh Medical Center is not an institution of purely public charity,” declared Ravenstahl at a Wednesday morning press conference.
Ravenstahl charged UPMC has falsely claimed tax exempt status when, in fact, it operates with a profit motive — and does much less for the community than it should as a tax-exempt charity.
So, the city is asking the Court of Common Pleas to declare that UPMC does not meet the five-prong requirements, often called the HUP Test.
“When they had revenues of over $5.7 billion, to give less than two percent back to the community is in my mind a clear failure of meeting one of the prongs of that HUP test,” said the mayor.
The mayor says the medical giant’s actions demonstrate it cares more about profit than the poor.
“They’ve closed hospitals in poor and poorly served communities, one of which is in the City of Pittsburgh, South Side,” he said.
Ravenstahl’s attack on UPMC’s charitable status brought a swift response.
“We easily meet all five criteria for our tax-exempt status,” said UPMC spokesman Paul Wood. “There’s no question.”
Wood says the mayor is off on UPMC’s donations.
“We contributed last year $622 million in charity care and other charitable contributions to organizations in the city, Allegheny County, and around the region,” Wood added.
But Ravenstahl says the bottom line is this.
“Do you consider UPMC a charity? My answer to that question is absolutely not. They’re not a charity. They haven’t been operating as a charity, and it’s time this community steps up and challenges them.
“The representation here speaks volumes about how serious we are and how frustrated we are with the lack of charity provided by UPMC,” he said.
But UPMC says this dispute is more about those politicians and the Service Employees Union trying to unionize UPMC employees.
“It’s very unfortunate that the mayor chose this occasion to pander to the union, the service workers union, and to pander to certain politicians,” noted UPMC spokesman Wood.
Ravenstahl admits his quarrel with UPMC’s tax status is more than just taxes.
“Hey, look, UPMC is going to be able to stand up and tell us why it’s okay to pay their workers only $11 an hour, and let’s have that debate,” the mayor challenged.
“Our employees recognize how good their benefits are, how well they are paid relative to what the union thinks it could promise them,” responded Wood, “and that’s why the union is failing miserably in its effort to organize UPMC workers.”
A bigger worry, says UPMC, is that without their tax-exempt status they would not be required to provide free emergency room or other medical services to the poor.
“If we didn’t do that, that obligation would be left to the city,” noted Wood.
And building a public hospital, says UPMC, would cost city taxpayers even more.
As for the future of the Pittsburgh Promise, Ravenstahl worried his actions might cause UPMC to yank its $100 million grant to the Promise but, he said, “I wasn’t going to let that deter me from doing what I think is right.”
No worries, says UPMC.
“When UPMC makes a commitment, unlike many politicians, we stick to that commitment,” Wood responded.