Pittsburgh's tax bull's-eye on nonprofits
Pittsburgh's tax-exempt charitable organizations are not very charitable when giving money to the city to help pay for police, fire and other services, officials contend.
The city expects about $12.6 million next year — less than 3 percent of its $470 million budget — in voluntary payments from nonprofits, charities and city-affiliated agencies in lieu of property and other city taxes. The government agencies will pay about 75 percent of that, budget documents show.
Pittsburgh and Allegheny County officials for years have tried to squeeze more money from the nonprofits. At the request of the Intergovernmental Cooperation Authority, one of the city's state-appointed financial overseers, Mayor Luke Ravenstahl is recruiting a committee to examine nonprofit payments.
“When you have those nonprofits that are not paying any property tax, or any type of tax, I think they should be giving their fair share,” City Council President Darlene Harris said. “They benefit from our road services, our police, our paramedics.”
County Council next month plans to review in a public hearing the tax-exempt status of UPMC's properties. The hospital system is the largest tax-exempt landowner in Allegheny County with holdings valued at $1.3 billion.
Spokesman Paul Wood said UPMC pays taxes on 49 percent of the 1,100 acres it owns in the county.
“UPMC is happy to operate under any set of rules or standards local, state or federal taxing authorities might establish as long as those same standards are applied fairly and in a nondiscriminatory manner to all nonprofits,” Wood said.
Some charitable organizations band together under the Pittsburgh Public Service Fund to contribute to the city's budget. The fund won't identify members or disclose how much each contributes.
In 2010, the fund included 46 members and contributed $2.6 million annually in 2010 and 2011. It expects to give similar amounts in 2012 and 2013.
Reynolds Clark, who represents fund members, declined to comment.
Pittsburgh also gets about $600,000 annually through separate agreements with city charities. A review of the agreements that the Tribune-Review obtained through a Right to Know request shows that 2011 payments included $132,355 from UPMC; $26,858 from Duquesne University; $31,585 from Carnegie Mellon University; and $40,000 from the Central Blood Bank.
Duquesne's share comes from agreements for the Gumberg Library, which was converted from a former parking garage, and the A.J. Palumbo Center on the Uptown campus, according to spokeswoman Bridget Fare. The agreements resulted from city challenges of tax exemptions for the two buildings.
Carnegie Mellon pays the city for its facility at the Pittsburgh Technology Center on Second Avenue, according to spokesman Ken Walters.
The remainder of what the city collects — about $9.4 million — will come from the Pittsburgh Water & Sewer Authority ($5.3 million), Parking Authority ($2.6 million), and Urban Redevelopment Authority ($1.5 million), according to budget figures. The city also received $208,185 from companies that manage Pittsburgh Housing Authority properties, according to the city Finance Department.
City Controller Michael Lamb said nonprofits own about 20 percent of the property in Pittsburgh. Including government agencies, they own $8.5 billion in city real estate, which would represent about $92 million in annual property tax revenue, according to Lamb's Comprehensive Annual Financial Report for 2011. State law prohibits governments from collecting property taxes from nonprofits.
“It's something that we need to pursue for increased contributions from them,” Lamb said.
Dana Yealy, chairman of the Intergovernmental Cooperation Authority, said he hopes the mayor's task force looks to cities such as Providence, R.I., for examples of partnerships with nonprofits.
Providence Mayor Angel Taveras, facing a $22.5 million budget deficit this year, secured more than $44 million in pledged contributions from tax-exempt institutions.
About $40 million of that is coming over 11 years from three universities — Brown, the Rhode Island School of Design and Johnson & Wales University — which, along with Providence College in a 2003 agreement, pledged $50 million over 20 years.
“It made sense as a good partner to help them out (in 2003),” said Dan Egan, president of the Association of Independent Colleges & Universities of Rhode Island, which represents the four schools.
Providence, which has about half the population of Pittsburgh and a $310 million budget, agreed to hand over to the three schools control of streets near their campuses and parking privileges at city-owned metered spaces, Egan said.
“We will work with the nonprofit community, City Council, legislative leaders and the soon-to-be-created nonprofit task force to encourage everyone to pay their fair share,” said Ravenstahl spokeswoman Joanna Doven.
Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or firstname.lastname@example.org.