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Changing Tax-Exempt Status?

SCRANTON — Hospitals in our area that are designated non-profits might have to start paying taxes on property if lawmakers pass a plan to amend the state ...
scr auditor 3-20-15

SCRANTON — Hospitals in our area that are designated non-profits might have to start paying taxes on property if lawmakers pass a plan to amend the state constitution.

Thursday, the state auditor general was in Scranton holding a public hearing on Senate Bill 4 and its impact on cities and hospitals.

Right now, legal guidelines determine what organizations, such as not for profit hospitals, are tax exempt.

If the bill passes the state legislature, Pennsylvania voters then would be asked to approve it to change the state constitution and allow lawmakers, instead of courts, to decide what groups do or do not get property tax breaks.

Educators worry a proposed change to Pennsylvania’s constitution would force tax-exempt schools, including the University of Scranton, to pay property taxes.

Others worry, such a change will loosen standards and allow more groups to become tax free.

At the center of the debate are not-for-profit medical groups.

“Organizations that act and sound like a big business,” said Chris Sloat of Wilkes-Barre.

Community activist Chris Sloat says the proposal should target not-for-profit organizations like Geisinger Health System, which gets tax breaks.

“And they have prime real estate. And they expand, and expand, and expand, at the cost to the taxpayers,” added Sloat.

“That’s clearly a concern that’s out there,” said Eugene Depasquale, (D) Pennsylvania Auditor General. “We are trying to gather just as much information as we can.”

The state auditor general recently released a report on the tax impact of not-for-profit medical facilities in three counties in our area.

Last year, these not-for-profits got $1.1 million worth of tax exemptions in Monroe County, $6.3 million in Lackawanna County and $9.1 million in Luzerne County.

Half the tax breaks for non-profit medical facilities in Luzerne and Lackawanna counties were given to Geisinger.

That’s $8 million that would normally go to schools or city services. But, Geisinger officials say the organization gives far more than it takes away.

In a statement, Geisinger says it performed more than $400 million of charity work and paid taxes on its property that does not meet its mission.

Scranton City Council Chair Bob McGoff says the proposed constitutional amendment doesn’t spell out what is a non-profit from churches to food banks.

“I think it’s too vague,” said McGoff.

For years, local government leaders complained that large non-profits like hospitals deprived cities and school districts of revenue.

On Thursday, leaders of cash-strapped cities from Allentown to Scranton said the current proposal to change to the state constitution is too vague and does not appear to be a solution.

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