Pittsburgh Approves Up to $5.4 Million in PILOT Payments

The Pittsburgh City Council has approved a round of voluntary contributions from a group of nonprofits in lieu of property taxes, the Pittsburgh Post-Gazette reports.

The Pittsburgh Public Service Fund, which comprises approximately forty tax-exempt organizations, will contribute an estimated $5.2 million to $5.4 million in payments in lieu of taxes (PILOTs) over two years. While some council members had argued that the total should be higher, the final bill approving the contributions was amended to direct the city controller to study the costs of providing police, fire, and other services to tax-exempt organizations in the city. Another ten to twenty nonprofits have negotiated separate agreements that will generate $450,000 to $500,000 in payments to the city this year.

Nationally, the use of payments in lieu of taxes to help close budget shortfalls appears to be gaining steam, with Memphis the latest municipality to consider joining the likes of Baltimore, Boston, Philadelphia, Providence, and others in going the PILOT route, the Commercial Appeal reports. On Tuesday, the Memphis city council voted to explore the feasibility and revenue potential of such a move, which would focus on tax-exempt organizations that gross more than $15 million annually. Over the last decade, PILOTs have been applied to tax-exempt entities in at least a hundred and seventeen municipalities in eighteen states.

Robert Lipscomb, director of the city's Division of Housing and Community Development, estimates that 30 percent of properties in Memphis are owned by tax-exempt institutions. "If you have 30 percent of your property not being taxed, that relates to everything else the city does," Lipscomb told the Commercial Appeal. "That's just a fact."

Maki, Amos. “Memphis to Explore Asking Tax-Exempt Entities to Make Payments.” Commercial Appeal 7/03/12.

Smydo, Joe. “Pittsburgh City Council Approves Nonprofit Contribution.” Pittsburgh Post-Gazette 7/03/12.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Community Improvement/Development, Public Affairs
Location(s): Memphis, Pennsylvania, Pittsburgh, Tennessee

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