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January 15, 2013

Pa. Lawmaker Wants Payroll Tax on Big Pittsburgh Nonprofits

A Pennsylvania State legislator is offering Pittsburgh a new weapon in its effort to draw more money from its hospitals and universities, proposing that the city levy a payroll-preparation tax on major nonprofit entities, reports the Pittsburgh Post-Gazette.

State Senator Jim Ferlo said he would introduce state legislation authorizing Pittsburgh to assess a 0.4 percent payroll tax on nonprofits that employ more than 250 people, slightly lower than the rate for commercial firms. If adopted, the measure would add $6-million to $10-million a year to city coffers.

Mr. Ferlo, a former Pittsburgh City Council member, said that by targeting big institutions his plan offers a "morally fair and equitably fair" way to cover the cost of providing police, fire, and other public services to tax-exempt institutions. "This would end the bickering and bartering that goes on when we try to get the nonprofits to pay their fair share," he said.