ShareThis Page
News

Pittsburgh's approach to tax-exempt nonprofits could be model for others in state

Bob Bauder
| Tuesday, Oct. 23, 2012, 12:01 a.m.
James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, (center) discuss the general fund revenues and expenses incured by the City of Pittsburgh over a 8-year period. The duo visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. JC Schisler | Tribune-Review
James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, (center) discuss the general fund revenues and expenses incured by the City of Pittsburgh over a 8-year period. The duo visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. JC Schisler | Tribune-Review
Dean Kaplan (left) of Public Financial Management  and James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, discuss the general fund revenues and expenses incured by the City of Pittsburgh over a 8-year period. The duo visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. (JC Schisler | Tribune-Review
Dean Kaplan (left) of Public Financial Management and James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, discuss the general fund revenues and expenses incured by the City of Pittsburgh over a 8-year period. The duo visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. (JC Schisler | Tribune-Review
Dana Yealy, chairman of the Board of Intergovernmental Cooperation Authority, leads one of the two agencies that oversees Pittsburgh's financial situation. 
J.C. Schisler | Tribune-Review
Dana Yealy, chairman of the Board of Intergovernmental Cooperation Authority, leads one of the two agencies that oversees Pittsburgh's financial situation. J.C. Schisler | Tribune-Review
A bar chart, handed out by Dean Kaplan (left) of Public Financial Management and James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, shows the general fund revenues and expenses incured by the City of Pittsburgh over an eight-year period. The pair visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. 
J.C. Schisler | Tribune-Review
A bar chart, handed out by Dean Kaplan (left) of Public Financial Management and James H. Roberts of Eckert Seamans Cherin & Mellott, LLC, shows the general fund revenues and expenses incured by the City of Pittsburgh over an eight-year period. The pair visited the Pittsburgh Tribune-Review to discuss Act 47 and the city's finances. J.C. Schisler | Tribune-Review

Pittsburgh could serve as a model for the rest of the state in determining how much money tax-exempt nonprofits should pay for city services each year, one of the city's financial overseers said Monday.

In a meeting with Tribune-Review editors and reporters, Intergovernmental Cooperation Authority Chairman Dana Yealy said the mayor holds the key to the success of a task force that will consider the question. Mayor Luke Ravenstahl must appoint a chairman who can “look the nonprofits in the eye and say, ‘It's time for us to think about this differently,' ” Yealy said.

The ICA, appointed by the state Legislature eight years ago to help Pittsburgh resolve its chronic financial problems, last week asked the city to create the task force in approving the mayor's 2013 budget.

“It's not all about getting money,” Yealy said. “It gives (nonprofits) a forum to tell their story as well. It's about getting buy-in from all of the stakeholders.”

Ravenstahl spokeswoman Joanna Doven said the mayor intends to comply with the ICA's request.

City officials say nonprofits, including government entities, own about 40 percent of Pittsburgh real estate and benefit greatly from services such as road maintenance and police and fire protection, but pay little to offset that cost, which amounts to millions.

The Pittsburgh Public Service Fund, an advisory group for the nonprofit community, has paid the city about $19 million in lieu of taxes since its formation in 2005. It expects to give the city about $2.6 million this year and next. Pittsburgh's annual operating budget is about $470 million.

Reynolds Clark, who represents the fund's members, declined comment.

Yealy also promised that the ICA would lobby the state for pension reform to help Pittsburgh cope with ballooning obligations that total about $1 billion. That will likely make the legislative agenda next year, said state Sen. Jay Costa, D-Forest Hills.

“I think there will be a conversation about pension reform in the next legislative session,” he said. “Whether it will include municipal pension reform remains to be seen.”

Yealy and Act 47 coordinators Dean Kaplan and James Roberts reiterated that the city has made great strides in addressing its financial problems. The Act 47 team, the city's other financial overseer, recommended two weeks ago the state Department of Community and Economic Development release the city from its oversight. But they want the ICA to remain and continue monitoring the city's compliance with initiatives created for its fiscal recovery.

A significant problem that remains is that its revenue remains flat with no new sources to tap, the overseers said.

They said collecting the city's 0.55 percent payroll privilege tax from nonprofits, currently paid only by private employers, is an option. Doing so would generate more than $27 million annually, said Bill Urbanic, City Council's budget director.

“We'd be able to pay down our pension funds and also make more capital improvements, fixing roads and other infrastructure,” he said.

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me