Officials call for Pa. lawmakers to slow down on charity amendment

NORRISTOWN >> Montgomery County commissioners’ Chairman Josh Shapiro, along with other officials across the state, urged Pennsylvania legislators Tuesday to consider the local ramifications of allowing the General Assembly to set the parameters on what is and isn’t a tax-exempt charity – an act that would amend the Pennsylvania Constitution.

The proposed amendment, known as Senate Bill 4, would allow the legislature to determine what constitutes a purely public charity. If a charity meets what the General Assembly’s qualifications, it would be deemed tax-exempt and taken off of the property tax rolls in its county and municipality.

“This is a concerning issue to us in Montgomery County and I think in counties all across Pennsylvania,” Shapiro said in a conference call with other officials and members of the press. “I can tell you with certainty that if they move forward in the manner, budgets at the local level of government will be significantly impacted by these decisions.”

During the conference call, Shapiro urged state lawmakers to work with their local municipalities and counties to develop a “sensible solution” to determining what qualifies as a tax-exempt organization “and who should qualify for such status.”

“It is my opinion, that before they hastily push forward a constitutional amendment, they should hold hearings and responsibly consider the impact of such a decision before taking such a serious step like amending the constitution of Pennsylvania,” Shapiro said.

Shapiro said if the Legislature moves forward, budgets at the county and local levels will suffer during a time when many local and county budgets are struggling.

“That means less money for education, less money for child care, less money for human services, less money for local economic development,” he said. “I would hope that they would slow down and carefully consider the significant and potentially negative impacts on cities, counties and municipalities all across Pennsylvania.”

Elam Herr, the assistant executive director of the Pennsylvania State Association of Township Supervisors, said the constitutional amendment would allow for charities that are not “purely public” to be taken off of the tax rolls.

“Realize that not every tax-exempt institution or entity out there is a purely public charity,” he said. “Everybody ought to realize that any time an institution, an individual, an entity is taken off the property tax rolls, somebody else—meaning the rest of the tax payers—is picking up that loss. From our prospective it is beholden to the legislature to slow up a little bit. They have two years that they can consider this legislation to look at the ramifications that this has and come up with a truly reasonable and fair standards for all that are involved.”

Because it is a proposed amendment to Pennsylvania’s constitution it has to pass two consecutive legislative sessions before going to a public vote in a referendum. The amendment passed for the first time during the 2013-14 session.

State Sen. Ryan Aument, (R- 36th Dist.) re-introduced the bill on Jan. 21, according to a press release on his website. The bill is co-sponsored by Senate President Pro Tempore Joe Scarnati (R-25th Dist.).

The bill stems from a ruling from the Pennsylvania Supreme Court, which, according to a press release on Aument’s website, “returned to a vague standard, previously used from 1985-1997, that charitable organizations must meet in order to qualify as a purely public charity.”

Charities have to meet five different criteria as set-up by the court. In the 2012 case, the court ruled against the charity and for Pike County.

“The court’s ruling will inevitably lead to protracted and expensive legal battles that not only drain local tax dollars, but also take money away from the core mission of some of our state’s most widely respected charities,” Aument said in the press release. “The purely public charity law was enacted in 1997 specifically to prevent this kind of situation, and I am hopeful this legislation will help rectify a difficult situation that resulted from the court’s poor judgment.”

A previous report from the Associated Press says if bill passes a second time, it could be seen by the public in the form of a referendum vote as early as the May general election.

Source: The Times Herald