Nutter ambivalent about making nonprofits contribute extra money

A day after City Council called on Mayor Nutter to ask tax-exempt nonprofit organizations to make voluntary payments to help fund city schools, Nutter expressed ambivalence toward the proposal.

"I think we all know I can't order the nonprofits to give us money for anything," Nutter said. "I don't think a PILOT program here or, demonstrated in any other city, is the kind of sustainable, long-term, serious funding that our school system needs."

Nevertheless, Nutter said he would review the resolution, which passed on a 16-1 vote.

PILOT, or "payment in lieu of taxes," is a strategy in which nonprofits are asked to contribute for the common good a percentage of what they would have owed if they paid property taxes.

Councilman Wilson Goode Jr. introduced the resolution, which asks Nutter to issue an executive order, similar to one Ed Rendell signed when he was mayor in 1995 asking nonprofits to contribute.

Large nonprofits, including the University of Pennsylvania and other city institutions, have fought back on the notion, saying that they already pay millions in other city taxes and that they support local schools through programs and scholarships.

Temple University issued a statement that read, in part: "Temple offers millions of dollars in scholarships to local residents, delivers important health care services at locations throughout the region, and engages in dozens of collaborations with the School District of Philadelphia."

The University of Pennsylvania, which declined to comment Friday, has faced pressure from students arguing the institution should pay up.

On Thursday, Penn student Devan Spear was one of about two dozen people who attended the Council meeting to support the resolution. She said she "came to the University of Pennsylvania because I believe in its reputation for civic engagement."

Having Penn making payment in lieu of taxes, she said, would be "a step toward making Penn the best city partner it can be."

Nutter said Friday that the school funding problem had to be handled from City Hall. He again encouraged Council to adopt his proposal for a 9.3 percent property tax increase earmarked for the school district.

"Superintendent [William] Hite has asked the city for $103 million of tax money that is sustainable, that is consistent, that is reliable," he said. "As worthy as the general idea of PILOTs is, they are not sustainable. They are not consistent. They are not tax dollars you can rely on on a regular basis."

Nutter also noted the value colleges, universities, and hospitals bring to the city in the form of partnerships and economic development.

They "enhance the educational opportunities for many of our young people in the school district and non-school district schools all across the city," he said.

Gwen Snyder, executive director of Philadelphia Jobs with Justice, which has been advocating for PILOTs, said nonprofits' contributions are greatly exaggerated and hard to calculate. She argued against Nutter's contention that the model could not be sustainable.

"Almost every city that has an Ivy [League school] has them paying some form of PILOT payment," Snyder said. "It was also a major source of revenue when it was implemented under Rendell," she said. She estimated that 33 percent of what nonprofits would otherwise pay in property taxes - the amount contributed under Rendell - could raise tens of millions now.