Amid the clamor at the Capitol last week over the historic House vote on privatizing the state liquor monopoly, a major resolution that could have a sweeping impact on most municipal governments in the state quietly passed the Senate, 30-20.
The measure is to amend the state constitution, restoring the Legislature's ability to define what constitutes a nonprofit entity for the purpose of local and state exemption. Last year the state Supreme Court, ruling on a dispute over a 1997 law, found that the courts, rather than the Legislature, have the authority to define nonprofit eligibility for tax exemptions.
Since then, several formerly tax-exempt institutions across the state have been compelled to pay property taxes, and Pittsburgh's government has launched litigation against the University of Pittsburgh Medical Center to try to diminish its tax-exempt status.
Tax exemptions are a huge issue for all struggling cities in Pennsylvania.
The primary reason that lawmakers moved the proposed amendment is to restore power to the Legislature. But the measure offers the opportunity to address the underlying problem.
There would be no point in passing an amendment simply to reinstate the 1997 law that was overturned by the Supreme Court. It is crucial that lawmakers address the much broader question of how nonprofit entities affect municipal governments.
Sen. John Blake, a Lackawanna County Democrat, said that he has been assured that majority Republicans are on board to craft a new law regarding tax exemptions rather than to simply reinstate the 1997 law.
Over the last 20 years, many ideas have been introduced in the Legislature to help municipal governments deal with the nonprofit issue, including the provision of state aid to cities where more than 20 percent of property is tax-exempt.
Many nonprofit, tax-exempt entities perform public services that are worth much more than the cost of their tax exemptions - vital work, such as health care, that governments otherwise would have to provide.
The law should honor that but ensure that the enterprises are held to those missions.
Timing is good because the Legislature last week also passed a bill to standardize local property tax assessment.
Those bills should lead to a way to help local governments deal with some of the fundamental inequities that contribute to their struggles.