UPMC and Highmark announced they will give the City of Pittsburgh a combined $45 million over five years at a City Hall press conference Thursday. It’s the largest voluntary contribution from tax-exempt organizations to the city in recent memory and the latest in a series of gifts since Mayor Corey O’Connor took office in January.
The money will be spent on new vehicles and equipment for the bureaus of fire and emergency medical services, O’Connor said. Highmark will give $20 million and UPMC will give $25 million. (UPMC announced a separate $10 million gift for ambulances in January.)
The total amounts to $11 million annually over the next five years from the two healthcare giants.
For UPMC’s part, its $35 million pledge over five years amounts to about half what it would pay in property tax if its property were taxable, according to a 2022 report released by the city and county controllers. Highmark’s $20 million pledge amounts to double what it would pay. (This does not factor in taxes that would be paid to the county or the city school district.)
“This has been talked about for many years, many administrations, and we’re here standing on a historic day and it’s going to benefit the residents for the future,” O’Connor said.
He said he did not yet know how many public safety vehicles would be purchased with the funds, but residents “will see a significant increase” in the coming years. City officials have said the aging vehicle fleet is in a dire state of repair and needs tens of millions of dollars in annual investment to remain operational.
“We believe that this is the right time and place to show up,” Highmark CEO David Holmberg said. “This is the right time and place because this region has momentum. If you look at Arts Landing, if you look at the draft, you look at the U.S. Steel deal, you look at the airport. We are on offense, and mayor, we appreciate you bringing us together.”
Leslie Davis, the CEO of UPMC, said the gift amounted to a “long-term promise to keep the momentum going.”
O’Connor said he thinks both healthcare leaders will be open to discussing further contributions after the five-year term of this gift ends.
City Controller Rachael Heisler said in a statement she commends the healthcare companies and O’Connor on reaching a “major milestone” and that it should be the first of many.
“I hope that this agreement will serve as the standard for subsequent agreements with our other large nonprofits as we all work together to get through these challenging budgetary years and stay focused on growing our population and our economy,” Heisler said.
Pittsburgh mayors have tried for years to get major nonprofits, namely universities and healthcare companies, to contribute more money to the city’s bottom line. Nonprofits own 20% of city property and are exempt from paying property taxes in Pennsylvania. That property had a cumulative assessed value of $6.4 billion as of the 2022 report, meaning the city missed out on $51 million in annual tax revenue.
A succession of mayors stretching back decades have tried to get major organizations to voluntarily chip in just a fraction of that $51 million to the city.
And the city may need it now more than any time since the 2000s fiscal crisis that sent the city into state oversight. Pittsburgh ran a budget deficit last year, and even after enacting a 20% tax hike for this year, city officials say they expect to run a $24 million deficit this year.
“It’s an unsustainable trajectory,” City Controller Rachael Heisler said during a City Council meeting this week.
Former Mayor Bill Peduto, who served from 2014 to 2021, spent years negotiating with major nonprofits and eventually unveiled a plan to have them contribute funds directly to a range of projects filling some of the city’s needs. That plan was announced at the end of his tenure, and his successor, former Mayor Ed Gainey, scrapped it.
Gainey took a more combative approach between 2022 and 2025, challenging the tax-exempt status on dozens of properties owned by the organizations and claiming to turn down a significant offer from UPMC because it was not large enough. (UPMC denied that the offer ever existed.) Gainey’s tactics were somewhat similar to those of former Mayor Luke Ravenstahl, who went to court to challenge UPMC’s overall tax-exempt status in 2013. Peduto, Ravenstahl’s successor, pulled the city out of the suit, saying the city couldn’t possibly win.
O’Connor pitched a variation on Peduto’s plan on the campaign trail: He’d ask the organizations for funds to cover specific projects that relate to their missions. They would never give the city money without a specific purpose, he said.
O’Connor’s efforts have also yielded contributions from local universities.
In March, the University of Pittsburgh committed $5 million over five years for parks, business corridors and public safety. Carnegie Mellon University pledged $3 million over five years for youth tech programming and green spaces.
Duquesne University, frequently cited among the top tax-exempt institutions, has not made any publicly known pledges to the city.
Beyond the top tax-exempt organizations, O’Connor has also attracted donations from the city’s foundation and corporate community. PNC Bank gave $2 million for snow plows through its charitable foundation. The Heinz Endowments gave $750,000 to fund the city’s comprehensive plan. And the Richard King Mellon Foundation gave $1.9 million for the Learn & Earn program, Mellon Square upgrades and the Independence Day celebration.
Charlie Wolfson is the local government reporter for Pittsburgh’s Public Source. He can be reached at charlie@publicsource.org.
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