Pittsburgh Considers Hiring Consultant to Boost Contributions From Nonprofits
Pittsburgh Considers Hiring Consultant to Boost Contributions From Nonprofits
The Pittsburgh City Council is weighing whether it should hire a consultant to help convince local tax-exempt organizations to voluntarily contribute more money to help the city bridge its budget gap, the Pittsburgh Post-Gazette reports.
City council president Darlene Harris told the Post-Gazette that other local governments will be approached to see whether they'll share the costs of a consultant, whose job would be to leverage bigger contributions from nonprofits, possibly by targeting their tax exemptions. Harris and other members expressed disappointment with the $5.3 million to $5.4 million that the city expects to receive from the Pittsburgh Public Service Fund, a consortium of some forty nonprofits, over the next two years.
While the council's finance chairman described the amount as "not good enough," the figure is an estimate based on the approximately $2.7 million the city has received in each of the past two years. The fund has not yet solicited contributions from nonprofits this year. In addition to anticipated contributions from consortium members, the city has separate arrangements with roughly ten other nonprofits that jointly are expected to contribute between $450,000 and $500,000 to city coffers in 2012.
Pittsburgh officials have had a long-running battle with hospitals, universities, and other institutions in the city that do not pay property taxes on all their land and buildings. Indeed, some council members have complained that certain tax-exempt institutions in the city routinely amass nine-figure surpluses and are easily able to pay for advertising and lobbyists, even as the city's public schools and port authority are starved for cash. Nonprofits argue that they contribute to the quality of life in the city in a variety of ways beyond taxes. The University of Pittsburgh Medical Center, for example, has pledged $100 million to the city-run Pittsburgh Promise scholarship program.
In a decision that might presage future legal battles, the state supreme court earlier this year ruled that most of a Pike County tract used as a school camp is taxable because the owner, a New York-based organization, did not meet the court's definition of a public charity. In the ruling, the court ruled that the camp owner did not relieve government of some of its burden and so did not meet one of the five the criteria for tax exemption. According to the Post-Gazette, council president Harris wants a consultant to help determine whether certain nonprofits in the city fail to meet another criterion of the definition: operating free of profit motive.
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