Is There a Breakthrough In Pittsburgh’s PILOT Effort?
Early last year, we told you that the City of Pittsburgh was embarking on a large-scale effort to review property tax exemptions for many of the largest nonprofits in that town of Champions. That’s right, the Steelers. Anyway, I also mentioned that Pittsburgh was following an old and ineffective strategy towards extracting payments in lieu of taxes (PILOTS). Hold a press conferences bemoaning the city’s financial burdens and pointing out that the richest nonprofit landowners pay the highest salaries while contributing nothing to fire, water, and sewer. And that their tax exemptions raise everybody else’s tax burden. Then announce some amorphous and always forthcoming legal challenge that never actually occurs. It is a strategy easily defeated by UPMC and Carnegie, among others, by mere silence. The big nonprofits typically don’t say too much publicly, not even in their own defense, because to do so would draw more attention. I think silence is still working. There is no sign of the threatened legal challenges.
But the Mayor is now touting a potential chink in the nonprofit armor. It seems that one of the “Big 4” Pittsburgh nonprofits is on record as saying it will agree to a PILOT as long as the others pay their fair share too:
The written commitment comes as a result of conversations between the Gainey Administration and the ‘Big 4’ nonprofits, in which Highmark has consistently verbalized its willingness to participate, so long as all non-profits agree, and the terms of the agreement reflect proportionality between them. The ‘Big 4’ also include the University of Pittsburgh Medical Center (UPMC), the University of Pittsburgh (Pitt), and Carnegie Mellon University (CMU).
In a statement provided to the Mayor to memorialize the commitment, Highmark characterizes its commitment to Pittsburgh as “deeply rooted” and “demonstrable… through substantial investments in building healthier communities” in the city. As part of that commitment, Highmark pledges that it is “ready to make a financial commitment as soon as all of the large nonprofits participate in a financial contribution that is proportional” to its impact on the City relative to the other members of the ‘Big 4’.
Proportionality has been a core negotiating position of the Gainey Administration in the talks with major non-profits. While all of the ‘Big 4’ are large landowners and employers, the size and value of their holdings and payrolls vary substantially. The Administration has proposed an agreement structure to the institutions in which they would make a payment corresponding to the size of their presence within the City.
What the Mayor is referring to a “written commitment” appears to be an email from Highmark:
“Highmark’s commitment to the city of Pittsburgh is multifaceted and deeply rooted. It’s not just about our headquarters being located here; it’s a demonstrable commitment through substantial investments in building healthier communities, encompassing an array of initiatives.
As we have said in the past, Highmark is prepared to meet to discuss financial contributions to the city of Pittsburgh, if the large nonprofits – including UPMC – are part of the meeting. Highmark is ready to make a financial commitment as soon as all of the large nonprofits participate in a financial contribution that is proportional, within the city, to its status as a purely public charity.”
I suppose this is a positive development after a year of crickets chirping. But its too soon to start holding our breath.
darryll k. jones