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June 14, 2007

City wants more money from nonprofits

If Pitt did not hold nonprofit status, the University would owe about $15 million a year in city taxes, according to an audit released last month.

The audit of eight local institutions of higher education and 14 health care concerns completed by Anthony J. Pokora, acting city controller, showed Pitt owns tax-exempt property assessed at roughly $1.4 billion.

Pokora announced the results of the audit May 11 at a press conference.

Pitt officials, however, say the University carries its share in other ways.

Robert Hill, vice chancellor for Public Affairs, maintained that Pitt’s influence as a driving force in the region’s economy more than offsets the tax revenue. “The Commonwealth of Pennsylvania has concluded that there should be nonprofit organizations exempt from taxes that provide a plethora of health, education and social services that the government cannot provide,” Hill said. “The University is pumping $1.5 billion annually into the economy of this region. We employ nearly 13,000 people. Our economic impact is enormous.”

Hill noted that the University also has contributed funds to the city voluntarily through a consortium of nonprofit organizations in the region.

Under a deal brokered by the mayor’s office in August 2005, the Pittsburgh Public Service Fund, a consortium composed of Pitt and more than 100 universities, hospitals, foundations and other charities, agreed to pay a total of $13.25 million over three years in lieu of city taxes.

An article published in the Feb. 20 Pittsburgh Post-Gazette, citing “public disclosure, interviews and documents obtained by the Post-Gazette,” reported that Pitt had given $800,000 to the fund in 2005, the first year of the three-year agreement.

Pitt officials would neither confirm nor deny that the published amount is accurate.

Pokora maintained that the service fund’s contributions, which have averaged $4.4 million annually over three years, is “not even close to being enough. The eradication of the tax base by the nonprofits year, after year, after year,” is largely responsible for the city’s financial straits, he said.

The public service fund contract runs out at the end of 2007, and the future of the fund is uncertain.

Rev. Ron Lengwin, spokesperson for the Pittsburgh Public Service Fund, told the University Times, “No decision has been made on the future of the service fund. After [the city] requested that we extend our voluntary participation beyond the three years, we met some months ago and we had a serious discussion. It was decided to meet again by the end of the summer. At that point, we’ll poll our members to find out who wants to continue the fund and at what levels [of contributions].”

—Peter Hart

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