$3 Million Offering from Pittsburgh Nonprofits ‘Not Sufficient’

May 22, 2012

A bill in Pittsburgh City Council would authorize about $3 million in voluntary payments from a group of the city's largest nonprofit organizations, but the legislation's sponsor really wants the nonprofits to pay three or four times that amount.

The group of nonprofits is offering the funds in an effort to offset some of the costs incurred by the city that cannot be recovered because group members are exempt from real estate taxes.

However, Council Finance Chair Ricky Burgess said entities like Highmark, UPMC and the city's universities should be giving a total of $10 million to $20 million to the city each year.

Burgess said they could do it in one of two ways.

"Either we should have larger PILOT agreements, payment-in-lieu-of-taxes, with the larger nonprofits, or we need a change in state law so that we can collect a payroll prep tax from the nonprofit organizations," said Burgess. He said neither option would work without the support of the nonprofits themselves.

Currently, many of Pittsburgh's largest nonprofits donate money to the city through a consortium called the Pittsburgh Public Service Fund. Burgess said state law allows the umbrella group to not make public the amount of money given by each nonprofit. Some nonprofits contend they give to the city through other conduits.

"Some of the nonprofits commit to the Pittsburgh Promise, but I believe that it is not sufficient," said Burgess. "I believe that the number should be … somewhere between $10 and $20 million a year that we should be able to reap from the nonprofit community."

Burgess's legislation would create an agreement between the Pittsburgh Public Service Fund and the city. The General Fund would take in about $3 million a year in 2012 and 2013 under the bill. According to the University of Pittsburgh, the PPSF payment in 2007 was $4.5 million.

Council will discuss the bill at Wednesday's committee meeting.