Pittsburghers Bemoan Lack of Nonprofit Support

Pittsburgh is no longer the city of rotting steel mills and out-of-work coal miners.  Its now much more inhabited by hospitals and universities and, as such, home to some of the largest nonprofits in the nation.  Not to mention PNC Park and Heinz Field, the constructions of which received large tax breaks.  It is a downright beautiful place from April to November.  A recent Pittsburgh Post-Gazette story, though, bemoans the lack of support provided by large tax exempt institutions like the University of Pittsburgh, Univeristy of Pittsburgh Medical Center, Carnegie Mellon University and many other beautiful, well endowed nonprofits located mostly in the Oakland section of the city:

Pittsburgh, like every other Pennsylvania city, is powerless to muscle any payments in lieu of taxes from tax-exempt organizations — even those with grand offices, rich executive compensation and enormous surpluses.  It’s all due to a 1997 state law that protects nonprofits and punishes municipalities. Until the Legislature addresses this costly imbalance, Pittsburgh and its peers will be forced to rely on the kindness of tax-exempts.  More than 100 tax-exempt universities, hospitals, health insurers, foundations, arts groups and religious organizations were kind enough, through the Pittsburgh Public Service Fund, to contribute $13.98 million in the last three years. Since it was $411,000 more than pledged, it was all the better for a financially distressed city with too much property that cannot be taxed to support public services.  Still, other cities in other states do better by their tax-exempt groups, and Pittsburgh, which is not out of the dark financial woods, deserves stronger support.

The editorial calls on the legislature to adopt laws requiring “real” payments in lieu of taxes.  As long as the many tax exempts in Pittsburgh take up large swaths of exempt property and attract large sums of exempt income, there will always be calls for PILOTS.  One supposes that the Pittsburgh Public Service Fund ought to err on being more generous in its voluntary payments, less the city, county or state impose the levels of generosity these insitutions thrive on.

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