Fontana Wants Fee For Nonprofits

Lawmakers in Harrisburg are being asked to consider legislation that would strip away some of the tax benefits of being a nonprofit organization in Pennsylvania. The measure sponsored by State Sen. Wayne D. Fontana of Brookline and State Rep. Timothy J. Solobay of Washington would leave the first 50,000-square feet of floor space owned by a nonprofit organization tax free and then a $100 per 1,000 square foot fee would be assessed on any remaining space. The idea is to hit the large nonprofit organizations while leaving small churches and charities out of the tax. Fontana says when he first talked about the amendment to the Institutions of Purely Public Charity Act there was not much support but now that Pittsburgh Mayor Luke Ravenstahl has brought up the issue of schools paying their “fair share” through a tuition tax he thinks he will have more support. Fontana says this may not be the best plan but it is a starting point for debate. Fontana says, “It’s my opinion that they have a financial obligation to the city or municipality for the services they get and the services they receive. Many of them have accumulated vast amounts of real estate and those things are hurting our tax base.” The bill would allow nonprofits and municipalities the option to continue with existing voluntary agreements, to impose a fee based on total square footage of properties, and to establish a limited real estate tax for properties owned by institutions. Rep. Solobay says, “It isn’t just big cities affected by tax exempt real estate properties. We have similar issues in the City of Washington and Washington County which I represent as the number of tax exempt properties grows and the burden of paying for services falls on the shoulders of property owners who do pay taxes. The intent of this bill is to help combat this problem by having non-profit/tax exempt entities pay a partial tax.”