From the office of State Sen. Wayne Fontana:Taxing large nonprofits and assessment moratorium


As I write this, the Senate just returned to session, and already there are a number of issues on the calendar for us to address. I recently introduced two bills that I am hopeful will be considered in the coming months which could have a real impact on the 42nd District and Allegheny County.

The first bill would require nonprofits to begin paying real estate taxes on the value of the land owned by their organization. It has become very clear – particularly in light of the ongoing dispute between the University of Pittsburgh Medical Center and Highmark – that there are nonprofits out there with no concern at all about contributing to the common good or lessening the burden on government and taxpayers. Instead, it’s about their bottom line. 

My legislation would require all nonprofits to pay on the assessed value of their land only (no buildings), but would exempt the first $200,000 of total land value. The exemption would not be on a per parcel basis, but would instead apply to all properties owned by the entity. I recognize that many nonprofits provide services that the government would otherwise have to perform and that many of these institutions are central to the revitalization of the communities in which they are located. My bill seeks to address the imbalance created by organizations where profit is clearly their driving factor. We see nonprofits in the community buying up real estate and expanding, getting bigger and bigger while making decisions that actually harm our communities. Asking them to pay taxes on only their land value starts to address that inconsistency.

The second bill is a re-introduction of legislation that would impose a moratorium on court-ordered assessments through November 2012 or until the state acts on assessment reforms. A similar bill, passed by the state legislature in June, was vetoed by the governor because it singled out just one county. My bill will apply to all court-ordered assessments in the commonwealth.

People in nearly every municipality in my Senatorial district have written to me, with the same pleas we have heard from county leaders. They want the system fixed before they are burdened with huge property tax increases. A state-wide moratorium on real estate tax assessments will help these communities avoid the tremendous burden that comes with reassessment.

Our state constitution insists upon uniformity in property assessments, yet the mandate on Allegheny County creates inequities instead. In Allegheny County, municipalities have seen residents leave the area and move to neighboring counties which have lower real estate values and costs of living. Twenty-two counties have not completed inspection of properties since at least the mid-1980s. Each county differs in their property markets and assessment systems. Even the Supreme Court has ruled that the base year system is increasingly inaccurate and at some point will become unconstitutionally non-uniform. 

Just last year, the Legislative Budget & Finance Committee made recommendations to enhance the current system and also provide options to the legislature for major changes to the system. The House of Representatives currently has more than one task force developing uniform standards for reassessment contracts; a self-evaluation tool for counties to determine when a reassessment is warranted; and criteria and procedures for data submission, verification, and collection. A moratorium would avoid the negative effects of reassessment without a uniform, state-wide system while allowing the General Assembly the opportunity to address the deficiencies in the current system.

As always, I look forward to communication with you on these and other issues that are of interest and importance to you – and welcome your comments.

Wayne D. Fontana
42nd Senatorial District



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