Putting a number on forgone Pa. property taxes

A report by Pennsylvania’s auditor general finds that some counties are losing hundreds of millions of dollars from organizations defined as charities and are therefore exempt from property taxes.

 

A report by Pennsylvania’s auditor general finds that some counties are losing hundreds of millions of dollars from organizations defined as charities and are therefore exempt from property taxes.

The study cherry-picks 10 counties — including Bucks and Montgomery –and tallies up how much money they lost in 2014 because of the nonprofit entities within their borders that don’t pay property taxes. It also discloses what those counties’ hospitals and medical facilities would have to pay in property taxes if not for the exemption.

Auditor General Eugene DePasquale said he knows some of these organizations make voluntary payments to local governments instead of property taxes, but those payments aren’t standardized.

“It was just really hard to get at those precise numbers,” DePasquale said. “Those were really all over the map.”

Schools, churches, and hospitals have been under scrutiny for years because there’s so much money riding on their charity status.

The courts and state Legislature have tussled for decades over who has the power to define a charitable organization. Lawmakers have begun trying to take control over the process. A proposed constitutional amendment passed during the last legislative session. It would need to be approved in the next two years and then clear a voter referendum.

DePasquale suggested the commonwealth could see even more charitable organizations if lawmakers have the power to bestow such a status.

“Whoever has the best lobbyist would then have a better chance of getting their property tax exempt by the Legislature,” DePasquale said.

The report sampled the following counties: Allegheny, Beaver, Bucks, Dauphin, Erie, Lackawanna, Lehigh, Luzerne, Monroe, and Montgomery.

In 2014, the auditor general’s report finds that Allegheny County lost more than $600 million in potential county, municipal, and school property taxes because of charity tax exemptions. In the same year, Montgomery County lost $230 million and Dauphin lost $138 million in potential property taxes.