Task force to scrutinize tax-exempt nonprofits
By Bob Bauder
Published: Sunday, Jan. 6, 2013, 8:33 p.m.
Pittsburgh has recruited 33 people to serve on a task force that will decide whether tax-exempt charities are paying their fair share for city services.
“Hopefully, they'll come up with a formula that's fair and understandable for everybody,” said Dana Yealy, who chairs Pittsburgh's Intergovernmental Cooperation Authority, one of the city's two state-appointed financial overseers.
Assistant Finance Director Cathy Qureshi picked task force members, selecting representatives from the city's neighborhoods, nonprofit organizations, corporate community and other sectors such as the mayor's office and City Council. She said the first public meeting will be this month.
The ICA approved Pittsburgh's 2013 budget under the condition that the city assemble the task force to determine how much in voluntary contributions it should receive from nonprofits each year.
The problem is nonprofits such as UPMC and the University of Pittsburgh aren't obligated to give the city anything, although the mayor's office credits them with driving Pittsburgh's “meds and eds” economy. Rich Stanizzo, business manager for the Pittsburgh Regional Building Trades Council, who confirmed he is a member of the task force, said he believes contributions will come only through forceful means.
He said the task force should determine how much property charities own and then lobby Harrisburg for a change in law that would allow cities to somehow extract money from them.
“I think no matter what (we) come up with, it has to be done legislatively,” he said.
City officials have complained for years that tax-exempt institutions, which include government entities, occupy about 40 percent of city real estate but contribute little monetarily for services. Charities make voluntary contributions known as payments in lieu of taxes through an umbrella group, the Pittsburgh Public Service Fund. The group is expected to contribute $5.2 million total in 2012 and 2013. The city's budget this year is about $470 million.
Yealy said he hopes the task force will offer a forum for all sides and use their views to develop a fair and defined formula for nonprofits' contributions. He believes they would rather cooperate than have government challenge their tax-exempt status. If they don't cooperate, he said, the city can “let the enforcement people get more aggressive and go that way.”
Reynolds Clark, who chairs the Service Fund's board, said the group's members contribute greatly to quality of life in the Pittsburgh region and hope to highlight that for the task force. He said he hopes the task force determines how much property charities own in Pittsburgh. Clark thinks it's much less than 40 percent.
“I think a lot of this is developing partnerships and understandings, and an understanding that it's a two-way street,” he said.
Council president Darlene Harris confirmed that she, councilman Ricky Burgess and council budget director Bill Urbanic are members of the task force. Qureshi confirmed that Nick Lyons, who works in the city's finance department, belongs. She refused to divulge other members' names until releasing the full list to the task force first.
Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or firstname.lastname@example.org.
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