UPMC hospitals denied bid for exemption

Central Pa. locations continue to pay taxes

UPMC Susquehanna’s Sunbury and Lock Haven hospitals, acquired by the Pittsburgh health giant three years ago, have been denied tax-exemption status.

The Northumberland County Board of Assessment released its finding Monday, saying the hospitals and related properties must continue paying taxes.

The parcels were previously owned by Tennessee-based forprofit Quorum Health, which bought them in 2006. Quorum operates 25 hospitals and 15 outpatient centers in 14 states, according to its website.

A UPMC spokeswoman on Tuesday declined to comment on the assessment board’s decision. UPMC has 30 days to appeal in Northumberland County Common Pleas Court.

Northumberland County Solicitor Frank Garrigan, who attended the appeal hearing, said the board did not cite a specific reason for the denial.

“There was testimony during the hearing that indicated that some parcels, or portions of the parcels, were utilized for purposes that likely are not exempt. UPMC felt all of the parcels were exempt,” Mr. Garrigan wrote in an email.

“When questioned by the Board, UPMC gave an indication as to the approximate breakdown of the parcels by use, but there was little documentary evidence provided at that time to backup these percentages,” he added.

Shikellamy School District Superintendent Jason Bendle said Tuesday that the district would have lost about $225,000 a year had UPMC Susquehanna been granted the tax exemption. The district has nearly 3,000 students at four elementary schools, one middle school and one high school.

“The district has been struggling to balance its budget over the past handful of years,” said

Mr. Bendle, who was named superintendent five months ago. With an annual budget of $50 million, the possible loss of tax revenue “is significant,” he said, and could have impacted the district staffing or services it offers.

Also, according to the Sunbury Daily Item newspaper, the city of Sunbury would have lost $74,975 in tax revenue and Northumberland County would have lost $72,500. Efforts to confirm those numbers were unsuccessful Tuesday as Northumberland County offices were closed for Election Day.

UPMC added Susquehanna Health to its growing network in October 2016.

The asset-purchase agreement included a UPMC commitment to invest $500 million in the hospital, with plans to expand its emergency, heart and vascular, and cancer services, as well as replacing its aging inpatient rehabilitation facility. According to the Sunbury Daily Item report, UPMC Susquehanna comprises 20 parcels assessed at $2.4 million.