Pa. Hospital to Make Hefty Payments in Lieu of Taxes

A major western Pennsylvania hospital network has reached agreements with two towns to make hefty payments in lieu of taxes on properties, according to the Pittsburgh Post-Gazette.

UPMC struck a deal with South Fayette, Pa., to pay half of what it would owe on property taxes on a parcel it is buying from the township for a children’s hospital. Earlier this year the $10-billion nonprofit health system made a similar bargain for its hospital in Erie, Pa.

Pittsburgh and Allegheny County officials—which have sought to collect more from nonprofit hospitals and universities for their use of police, fire department, and other public services—said they are looking closely at the deals. UPMC owns $1.4-billion worth of untaxed property in the county, most of it in Pittsburgh.

“If they’re doing it there, why can’t they do it here as well?” said the city’s mayor, Luke Ravenstahl.

The article, part of a series on UPMC’s finances, details the organization’s voluntary payments in Pittsburgh and other communities, which on a percentage basis are well under the 50-percent threshold set in South Fayette and Erie.