Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Tax Exemption Amendment Stalls State House 'Wait and See' Approach Portends Delay for Referendum

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Tax Exemption Amendment Stalls State House 'Wait and See' Approach Portends Delay for Referendum

Article excerpt

A proposed change to the state Constitution, which aims to give legislators more power to set rules for tax exemptions, has stalled in the House after whizzing through the Senate, jeopardizing its chances of appearing on the November ballot.

When the proposed amendment won the General Assembly's initial approval in 2013, "it appeared that this was a black-and-white issue," said Steve Miskin, spokesman for the House Republican majority, on Thursday.

But constitutional amendments require the Legislature's approval in two sessions before they go before the state's voters, and this time more deliberation is needed, Mr. Miskin said. "I'm not aware of any timetable," he said. "Let's kind of wait and see what this does and what it is, and let's kind of gauge things."

The proposed 28-word amendment aims to cement the role of the Legislature in defining "purely public charities." It is a response to a 2012 state Supreme Court decision that gave judges broad discretion over tax exemptions. That decision marginalized the Legislature's Act 55 of 1997, which defined charities based on accounting measures.

Since 2012, governments and nonprofits have sparred over exemptions in at least 10 counties.

Nonprofits argue that they provide needed services to the community and that if taxed they would have to cut back on activities. They say they want clear standards and argue that without such clarity they face frivolous challenges.

On the other side are municipal officials, employees of taxing districts such as schools, and those who believe large nonprofits such as hospital systems and universities should pay taxes when they behave more like for-profits than charities. They fear the Legislature would curtail their ability to challenge tax exemptions, to the detriment of local economies.

The Hospital & Healthsystem Association of Pennsylvania has emerged as the loudest voice for the amendment. Opponents include Pittsburgh Mayor Bill Peduto, Allegheny County Executive Rich Fitzgerald and labor groups such as the Service Employees International Union and Fraternal Order of Police. …

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