In a 30-19 vote, the Pennsylvania Senate approved a measure that would allow the Pennsylvania General Assembly, rather than the courts, to determine whether organizations qualify as public charities making them exempt from local property taxes.
Pennsylvania Auditor General Eugene DePasquale released a special report on property tax exemptions last year revealing 10 counties in the state are potentially losing out on $1.5 billion in property tax revenue per year because of the exemptions. Medical facilities, including Pittsburgh-based UPMC and Pittsburgh-based Highmark Health Network, accounted for 12 percent of the lost taxes, according to a TribLive report.
Critics of the constitutional amendment claim nonprofit "healthcare behemoths" in the state stand to benefit the most from the proposal and argue the amendment "will hamper the ability of municipalities to challenge the status of exempt organizations," according to TribLive.
Challenging nonprofit's tax-exempt status in Pennsylvania made headlines when the city of Pittsburgh unsuccessfully challenged UPMC's tax-exempt status last year, according to a Law360 report.
The proposal passed the General Assembly in 2013, and if the Pennsylvania House approves the measure in coming months, the proposal would be put on the statewide ballot in November.
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