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October 1, 2009

City & county want more from nonprofits

Oakland campus students living in Pitt housing may be charged a fee just for the privilege under Mayor Luke Ravenstahl’s $452.8 million city budget proposal announced Sept. 21.

In order to bridge a projected $15 million annual shortfall in the city’s worker pension fund commitment, Ravenstahl has proposed a yet-unspecified mixture of fees on all-day parkers at city Parking Authority garages, hospital patient admissions and water service for medical institutions.

Also on the table is an unspecified per semester surcharge on students living in college housing.

In announcing his budget proposal, the mayor said he intentionally was vague about the amounts of each of these potential fees because they needed to be determined in collaboration with City Council and with the Municipalities Financial Recovery Act 47 committee, a team of state-named financial managers and attorneys that has overseen the city’s financial affairs since 2004. Ravenstahl said he “was not wedded to anything,” but that the budget would need those or other renewable revenue streams to make up the pension fund deficit. The city’s coffers have in hand less than one-third of the nearly $900 million in pension fund legacy obligations for the 3,200-member city workforce.

In June, Ravenstahl unveiled an Amended Recovery Plan, mandated by the state-appointed oversight board under Act 47. (See July 9 University Times.)

That plan, approved by the Act 47 board and City Council on June 30, authorized the city to pursue several new revenue-generating options, including as the first alternative hiking the city workers’ employment (EMS) tax from $52 to $145 annually and/or expanding the city payroll tax to the city’s nonprofits, including Pitt. Both actions would require the state legislature’s approval.

(A 1984 state law prohibits the taxing of nonprofit institutions.)

Since the legislature failed to approve either measure, Ravenstahl proposed other options also authorized under the recovery plan, including levying a surcharge on students. While the amount of the surcharge is undetermined, in June the mayor’s office stated that a $50 per student, per semester fee would bring in $3 million annually to the city.

Various  City  Council  members will hold private briefings Oct. 9 with Pitt officials.

According to Robert Hill, vice chancellor for Public Affairs, “This is not one meeting with all members of council. The discussions will be focused on what Pitt is doing to contribute to the greater good of the City of Pittsburgh, including payments of various types of taxes as well as numerous in-kind services including the Pitt Police Department.”

In a separate development, county Chief Executive Dan Onorato Sept. 23 proposed that area nonprofit institutions including Pitt collectively donate at least $4 million to the county next year. Onorato stressed that he was not talking about the proposed $773.5 million 2010 budget that he introduced Sept. 18. At that time, he referred to adding $30 million in new revenue sources to balance the 2011 projected budget.

On Sept. 23 Onorato specified that for the 2011 budget he would seek $4 million-$5 million from area nonprofit institutions as part of the new revenue streams.

Hill said, “As for the county seeking contributions from non-profits for the 2011 budget, all we know is what we have read in the news. Those articles reflected a focus on funding coming from the hospital community. There have been no specific discussions with the University by the county at this time.”

—Peter Hart

Filed under: Feature,Volume 42 Issue 3

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