Elder-Care Facilities Seek Tax Exemption

Article excerpt

Tough economic times might get tougher for some municipalities and school districts if officials from local elder-care facilities win their battles to stop paying real estate taxes.

A 2007 state Supreme Court ruling that nonprofit organizations passing a five-point test can be exempt from real estate taxes has triggered tax appeals by senior-care facilities throughout the region.

Officials from those facilities say they meet the court's primary requirement that they operate as true charities because no residents will ever be asked to leave because they run out of money.

Though all eyes are fixed on the cases brought by the elder-care facilities, some officials fear the appeals may trigger a landslide of challenges from other nonprofit organizations. That could include organizations that care for the mentally retarded, mentally ill or handicapped and other types of medical facilities that provide care for the poor and uninsured.

"This is all virgin territory. We're all going to learn about it," said Hempfield Area School District Solicitor Dennis Slyman.

There are 32 retirement communities in Allegheny, Armstrong, Butler, Indiana, and Westmoreland counties, according to the state Insurance Department, which licenses the facilities. Allegheny has the most -- 19 -- followed by Westmoreland with four. There are no centers in Fayette County, according to the state.

To date, only a few of those senior facilities have appealed their tax statuses.

Area school districts would take the biggest hits because they receive the bulk of property tax revenues.

For instance, the Franklin Regional School District, which includes students from Murrysville, could lose $183,000 from its $44.5 million budget if Redstone Presbyterian SeniorCare wins its appeal to the Westmoreland County Tax Assessment Board. Redstone operates three facilities in Hempfield, North Huntingdon and Murrysville.

The Norwin School District, which takes in North Huntingdon, would lose $161,000 from its $54.9 million spending plan.

The Hempfield Area School District stands to lose $117,000 from its $79 million annual budget if Redstone prevails.

Some want refunds

The Bethlen Home in Ligonier, which is operated by the Hungarian Reformed Federation of America, has filed a complaint against Westmoreland County seeking the return of more than $34,000 in taxes it paid in 2006 and 2007. It also wants the Ligonier Valley School District to refund more than $146,000 in school taxes. Bethlen operates a 96-bed skilled-nursing center and a 10-bed unit that cares for patients suffering from dementia.

In Allegheny County, the Mt. Lebanon and Chartiers Valley school districts are appealing decisions by the Allegheny County Board of Assessment Appeals that exempted Asbury Health Center in Mt. Lebanon and the Baptist Home Society in Scott Township from paying property taxes.

The exemption would cost the Mt. Lebanon district about $11,000 of its $73.3 million budget and the Chartiers Valley District more than $16,000 from its $47.8 million plan.

The monetary stakes are relatively small for the school districts at this point, but officials are concerned about those possible challenges.

"Anytime there's an exception case, as soon as there's a landmark decision, copy cats will file an appeal under that exemption," said Randy Waggoner, an assessor in Perry County and president of the Assessors Association of Pennsylvania. "It could have a wider impact, but each case has to be taken on its own merits."

The Redstone appeal, which states the facilities are "purely public charities" was denied by the assessment board and will go before a Westmoreland County judge in the spring. …