UPMC — Pittsburgh’s largest employer and largest owner of tax-exempt property — will give the city $10 million to purchase new ambulances, Mayor Corey O’Connor announced Thursday morning.
The gift will bolster an ambulance fleet that has many vehicles beyond their planned life cycles with at least 10 new vehicles, and the mayor said it will free up money to buy 35 new trucks that can plow snow.
“UPMC stepped up,” O’Connor said during a press conference. “… We are here to thank UPMC, to thank [CEO] Leslie Davis for placing a call earlier this week to say this is the start of a great partnership.”
The announcement is an abrupt change for both the city and the healthcare giant. Former Mayor Ed Gainey, who served from 2022 until Jan. 5, tried taking major nonprofits including UPMC to court to revoke tax exemptions on certain properties, including major hospitals. UPMC responded not with a major gift but with terse statements saying they would participate in a contribution to the city if other major nonprofits stepped up simultaneously.
Thursday’s announcement did not include contributions from any other nonprofits, but Davis said she intended to set a new precedent.
“We hope that this investment will serve as a catalyst for broader collaboration among other civic, nonprofit and private sector partners who share our dedication to the well-being of all of Pittsburgh’s communities,” Davis said.
The gift comes as the city is in a difficult financial situation. City Council raised tax rates in December to fill a hole left by slumping property tax revenue, and many officials and community organizations have called for UPMC and other nonprofits to take a larger role in bolstering the city’s bottom line.
A report released by the city and county controllers in 2022 found that 20% of assessed property value in the city is owned by nonprofits, which under Pennsylvania law are exempt from paying most property taxes. That property would yield about $51 million in annual tax payments if they were not exempt, the controllers said.
UPMC alone was exempt from nearly $14 million annually in city property taxes that would be due if it was a for-profit entity. The next four largest nonprofit property owners — Highmark/AHN, the University of Pittsburgh, Carnegie Mellon University and Duquesne University — brought the total above $34 million.
Thursday’s announcement was for a one-time payment, though both sides talked of a continuing partnership, setting it apart from so-called payment in lieu of tax (PILOT) agreements that public officials have long called for, and other cities including Providence, Boston and Erie have struck with local institutions.
City Controller Rachael Heisler, who took office after the 2022 report was produced, hailed the $10 million gift as a “significant investment” in a written statement Thursday.
“UPMC’s generous contribution sets an example for how nonprofits can partner with the city to sustain essential services, and we hope it encourages similar commitments from others in supporting critical public operations,” Heisler said.
The city’s vehicle fleet has been under scrutiny this week as dozens of snow plows broke down during the largest snowfall in more than 15 years, causing many side streets to remain treacherous several days after the storm.
City Councilor Barb Warwick, who chairs the Committee on Public Works and introduced a bill this month aimed at increasing funding for the city’s vehicle fleet, called the UPMC gift “definitely a start.”
“Definitely glad to have it, definitely worth celebrating, but a first step nonetheless,” Warwick said. “I think the fact that the taxpayers put in about $28 million [via the tax increase], I would like to see something closer to that as far as a contribution.”
Alex Wallach Hanson, executive director of the activist group Pittsburgh United that has long pushed for greater contributions from UPMC to the city, said the gift is “nowhere near enough.”
“Pittsburgh homeowners just agreed to pay $28 million a year in increased property tax for perpetuity while UPMC is agreeing to make a one-time contribution of $10 million,” Wallach Hanson said. “That’s a great start and sets a good precedent of UPMC contributing cash, which is what our city needs, but it’s nowhere near enough to make our city whole for the long term.”
Charlie Wolfson is the local government reporter for Pittsburgh’s Public Source. He can be reached at charlie@publicsource.org.
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