Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

April 18, 2013

Schools want nonprofit task force suspended

In the wake of a move last month by Pittsburgh Mayor Luke Ravenstahl to challenge UPMC’s tax-exempt status, a consortium of local colleges and universities is calling for the suspension of Ravenstahl’s nonprofit sector support task force.

The task force was mandated as a condition of the Intergovernmental Cooperation Authority’s (ICA) approval of the city’s budget last October. The ICA, which since 2005 has had oversight over the city’s budget, called for a task force to “review, study, benchmark, develop and submit a written proposal to the city and the ICA regarding the level, length and form of support from the nonprofit sector to the City of Pittsburgh.” (See Jan. 24 University Times.)

Kenneth Service, executive director of the Pittsburgh Council on Higher Education (PCHE), which represents Pitt and nine other Allegheny County colleges and universities, said the city’s move, along with proposals in Harrisburg that could subject nonprofits to payroll and property taxes, has created an environment “not conducive to a productive conversation.”

Nine of the appointees to the nonprofit sector support task force represent PCHE member institutions.

The 36-member task force has yet to meet, despite a June 30 deadline for its proposal on nonprofit sector support for the city.

Task force chair Donald Smith, president of the Regional Industrial Development Corporation of Southwestern Pennsylvania, confirmed that no meetings of the task force have been scheduled and said he is working with the ICA with regard to the deadline.

“It’s hard to get people to make voluntary contributions when they don’t know what mandatory contributions they may have to make,” he told the University Times. “Many don’t believe a solution is possible while the lawsuit and legislation is still pending.”

In an April 3 letter, PCHE told the mayor that its members “believe that we have no choice but to focus on the litigation and legislation that has targeted us, rather than investing in the conversation that had been anticipated when the task force was created.”

PCHE also sent a letter on April 9 to ICA chair Dana Yealy that called for the suspension of the task force and, Service said, clarified that PCHE schools had not reversed their decision to participate in the task force.

Service told the University Times, “We have tried to emphasize we are willing to continue to participate,” adding that deliberations must be postponed until the current issues are resolved. He said the city’s challenge to UPMC is the main issue, adding that proposed state legislation and uncertainty over who will be Pittsburgh’s next mayor are factors as well.

“We were hoping to have a broader conversation over the city’s finances, not just how to get money out of nonprofits,” Service said. “What’s needed is a larger conversation about the fiscal issues facing the City of Pittsburgh. The universities stand ready to participate in that conversation.”

Two Pitt administrators are task force appointees. Paul Supowitz, vice chancellor for governmental relations, is representing the University. Renny Clark, vice chancellor for community initiatives, is serving in his role as co-chair of the Pittsburgh Public Service Fund, a group of nonprofits that, since 2005, has contributed to the city in lieu of taxes.

Clark said PCHE members agreed that they felt there could be no progress under the current circumstances. “It’s a strained situation,” he said, adding, “The nonprofits really wanted to come to the table but not be coerced into any preset course of action.”

Yealy stressed that the ICA is not demanding that nonprofits contribute to the city’s budget, adding that the ICA’s concerns center on proving there is a source for the budget line item for nonprofit support.

Pittsburgh City Council last summer approved an agreement under which the Pittsburgh Public Service Fund would provide a total of approximately $5.2 million in voluntary financial support to the city over the two-year 2012-13 period. (See Oct. 25, 2012, University Times.) The question is whether there will be nonprofit support in future years and, if so, at what level.

Yealy explained that the ICA must approve the city’s budget as well as a five-year plan, noting that there was no evidence of funding for the line item in upcoming years. “We are not demanding that there is one. They don’t have to have a number,” he said, noting that the city could choose to cut expenses or get revenue elsewhere to balance the budget.

Complicating matters is Ravenstahl’s decision not to run for re-election. “It’s not his budget,” Yealy said, noting that the city’s next mayor would have 90 days to modify and submit a revised budget.

Yealy said the ICA has not heard from Ravenstahl in response to the PCHE letters. “We are waiting for the mayor, to hear what his intention is” regarding the future of the task force. “We will probably meet once we hear from the mayor,” Yealy said.

A spokesperson for the mayor could not be reached on Wednesday before the University Times went to press.

For now, the June 30 deadline for the task force’s report still stands, Yealy said, explaining that the deadline was set to give the city time to digest the task force’s report and fit it into its upcoming budget, which is due in September.

Yealy said the ICA has not decided on a course of action should the task force fail to meet the deadline. “Why anticipate something in June that’s not here yet?” he said.

—Kimberly K. Barlow


Leave a Reply