Friday, April 4, 2014

Pittsburgh Nonprofit Target of Union, City Government Seeking Tax Revenue

The New York Times reports that the University of Pittsburgh Medical Center (UPMC), a nonprofit conglomerate of 22 hospitals and 62,000 employees, is facing a campaign by the Service Employees International Union to organize more than 10,000 of UPMC’s service workers.  The story describes the effort as, at times, seemingly “less a traditional unionization battle than an experimental labor effort to demonize, irritate and embarrass the hospital system into adopting a $15-an-hour wage floor, up from the current $11.”  According to union officials, says the story, UPMC’‘s adoption of a $15 minimum wage would render UPMC “a model for Pittsburgh and other cities where hospitals are the largest employers.”


The union is reportedly applying additional pressure by supporting the City of Pittsburgh’s attempts to subject UPMC’s land and facilities to property taxation.  Here is what the story reports on the subject of taxation:


Not stopping there, the union is backing Pittsburgh’s efforts to strip UPMC of $20 million in annual tax breaks on the grounds that it is a profit-seeking company. If it were a nonprofit, the union and city officials ask, why does UPMC, with $10.2 billion in revenues last year, run for-profit facilities in Italy, Ireland and Kazakhstan?


Hospital officials deny the union’s assertions.


W. Thomas McGough Jr., UPMC’s chief legal officer, defended the tax breaks, saying the hospital system provided $887 million last year in charity care, donations for scholarships and subsidies to its medical school. The corporate jet, he said, is largely used to fly teams of executives and doctors to Italy, Kazakhstan and other out-of-the-way places. He said the for-profit operations overseas provided $400 million in profit to bolster the nonprofit activities.



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