Topic submitted by: Ben Webster, Library Clerk, Access Services: Stacks, Van Pelt Library

Article BY CATHERINE SCOTT & BILL GAULT
Philadelphia Daily News

AS PROPERTY taxes in Philadelphia are expected to cost taxpayers an extra $90 million later this year, the Daily News' recent story ("Not To Call You Cheap, But . . . " ) on the lack of tax payments by some of the city's biggest enterprises demands further examination and review.

Holly Otterbein's It's Our Money story centers on nonprofit institutions that pay little or nothing for the city services from which they benefit, and on a mayor who has made little effort to collect for those services.

Charitable nonprofit organizations, which include private universities, hospitals, churches, soup kitchens and museums are exempt from property taxation in all 50 states.
Yet, these institutions and their users impose costs on Philadelphia by consuming public services, such as police, fire and emergency medical, roads, snow removal, street lighting, trash collection, clean air, clean water, comprehensive library services to help with research and the like.

If these institutions don't contribute to the costs of providing those services, then the financial burden falls on those citizens who do pay property taxes. As with all costs, the greater the pool of payers, the less the individual financial burden. Most residents' taxes would decrease if the deadbeats paid something - paid anything.

The fact is, property-taxpaying citizens and businesses are subsidizing the costs of some of the largest, wealthiest and most land-gobbling businesses and landowners in the city. Residents are subsidizing costs of non-Philadelphia parents who send their children to the costliest private educational and medical institutions in America.

Every Philadelphian or non-resident who shops in the city pays an additional 2 percent sales tax to cover the costs of providing services to the cheapskates.

As the Daily News pointed out, prior to Mayor Nutter, the city coaxed some of these nonprofits into making payments in lieu of taxes, or PILOTs.

In the past, nonprofits in Philadelphia made a PILOT payment as a portion of what they would owe in property taxes were they not tax-exempt.

Over the last 15 years, city-wide PILOTs have been allowed to dwindle from $9 million to $300,000 annually. This, at a time when property values have more than doubled. And during a time of massive expansion by the "Eds and Meds" communities that have gobbled up many more blocks of prime real estate, taking acres of real estate off the tax rolls. The Nutter plan calls for further expansion and building on some of the most valuable land in the city.

This 97-percent reduction in PILOTs didn't happen in an economic no-man's land; it was allowed to proceed when other arms of the Eds and Meds entities were growing wildly rich.

In 2011, Penn reported a $1 billion profit on their endowment investments which now total more than $6.5 billion. Other Ivy League schools make PILOT payments in their host cities, including Harvard, Yale and Brown.

The huge disparity between the ability to pay and what the richest landowners do pay isn't just about Penn, Drexel, St. Joe's, La Salle, or about the ever-expanding Children's and Temple Hospital complexes.

What does Independence Blue Cross pay? Amtrak? Why does SEPTA pay less than the Sunday Breakfast Association, an organization that tends to the homeless and poor who can ill afford more Nutter service cuts?

If PILOT payments were made equaling just 40 percent of real-estate taxes exempted, the City would collect more than $40 million a year. Just the largest 14 of the exempts, paying their fair share, would provide $21 million per year.

Or, consider one alternative - the city cuts off trash, fire, police, street lights, road repair, EMTs, sanitation inspections of food services, etc., to the Eds and Meds' campuses, which contribute nothing to the costs to provide those services.

How many parents across the country will be prepared to pay $50,000 a year to send their children to our city?

What is good for Philadelphia is good for Penn. Nonprofits' free ride hasn't been good for Philadelphia taxpayers.
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Catherine Scott is president of American Federation of State, County & Municipal Employees District Council 47. Bill Gault is president of Local 22, Fire Fighter and Medic Union.