[lbo-talk] Hypothesis for running a Progressive State Government

John Lacny jlacny at earthlink.net
Tue Aug 31 05:39:26 PDT 2004


Wojtek:


> You may not be aware of it, but most research, health,
> and educational institutions in this country are 501(c)(3)
> nonprofits and thus exempt from income and property
> taxes. And that creates a big problem for cities like
> Baltimore, to which the presence of such institutions is
> a drain on their already meager tax base

Like Johns Hopkins, I assume. The University of Pittsburgh Medical Center (UPMC), a non-profit, is estimated to have made $200 million in the last fiscal year. It's a huge landowner, but most of those properties aren't taxed -- I don't have a handle on what percentage isn't taxed, but it's high. Apparently it's even higher for the related institution, the University of Pittsburgh itself, which is an even bigger landowner and has fewer for-profit subsidiaries and ventures.

It's true that institutions like these are also major employers, and they bring outside revenue into an area that would otherwise not come to these archaic post-industrial places -- most of it in the form of government money, whether from the state or the federal level (in the form of research grants and capital, yes, but also payments like Medicare). Nevertheless, the fact remains that in years past the major employers were for-profits who were paying taxes to the municipality; now these places contribute to cities' financial crises, especially since the higher-paid employees don't even live in the city and don't pay taxes. And usually the only way a city can get them to pay PILOTS is by finding a way to threaten their tax-exempt status, which is increasingly difficult to do on the legal end of things because it is almost impossible to do on the political end, since the people who run these institutions are part and parcel of the ruling class in each city, arguably with as much influence on local policy as the heads of major corporations.

Wojtek is pessimistic about the possibilities of local policy challenges to these powerful institutions, but national- and state-level policy is even harder for progressives to shape at this stage, for obvious reasons.

- - - - - John Lacny http://www.johnlacny.com

People of the US, unite and defeat the Bush regime and all its running dogs!



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