Statement and Advance Notes to the PA House Finance Committee
Pittsburgh Public Hearing , August 30, 2007
From Mark Rauterkus, Libertarian
candidate for Pgh Controller & Pgh City Council, district 3.
Vice Chair of the Allegheny County Libertarian Party
Mark@Rauterkus.com http://Elect.Rauterkus.com http://Rauterkus.blogspot.com
The full statement will be sent to the committee via email.
Welcome to Pittsburgh.
I protest the fact that I was NOT able to speak at a PUBLIC HEARING.
Advance notice was given.
Only 4 minutes was requested.
I have experience in professional life with nonprofits:
Work settings include: Gov, nonprofit sports/athletics, public schools, private schools, private clubs, public universities, private universities, religious universities
As an advocate, I worked to fight against UPMC's expansion on the South Side, 1999
Our Libertarian Party, the party of principle, has different perspectives and they need to be told as the solutions of Geo-Libertarians provide common sense.
I've called for the Pgh Service Fund (nonprofit co-op) to issue a self-imposed moratorium on land expansion.
Problem is not the tax free status, rather the swelling of the nonprofit footprint. The expansion of un-taxed land needs to be reversed. The way to 'tighten the belt' or 'get a grip' is to have the nonprofits inventory of land be understood, documented with strong, clear inventory.
That is the work of the City Controller.
That is an open source process and solution.
The nonprofits need to reduce total land holdings by 1% each year for 15 years.
Messing with Act 55, without getting to the root of the problem would cause more serious problems.
Politicians in Pennsylvania are great at the creation of new taxes, not new wealth nor opportunities.
Tax anything that moves
Tax most things that are not moving that are valued – like parking
As taxes increase and conditions change, people vote with their feet and depart the region and state.
Many institutions have departed the city:
Shady Side Academy, a prep school, is not in Shadyside. (see comments)
North Catholic, Luke's old school, is moving out of Allegheny County.
Alcoa moved its corporate headquarters to NYC.
MN's Mayo Clinic, like UPMC, has branches in Florida, East Coast, etc. OUTSIDE home state.
UPMC can open other non PA sites. UPMC can move. UPMC moved it admin to USX Tower, downtown. Moved Children's Hospital out of Oakland. Purchased hospitals in Braddock, and elsewhere.
Nonprofits should build UP – not out. Curtail land expansion. Make urban density.
News coverage from the event, as per the Post-Gazette.
State Senate reviews nonprofit law State Senate reviews nonprofit law Thursday, August 30, 2007 By Rich Lord, Pittsburgh Post-Gazette State senators faced off with hospitals today in an early round of what could be a lengthy debate on how much nonprofit organizations pay to local governments. The occasion was a senate fact-finding hearing in Pittsburgh Council Chambers on Act 55, the 1997 law defining nonprofit groups and their payments to governments. 'The act has worked very well,' said Thomas Boyle, a lawyer for Buchanan Ingersoll & Rooney who represents hospitals including the University of Pittsburgh Medical Center. 'If it ain't broke, don't fix it.
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3 comments:
full article:
State Senate reviews nonprofit law
Thursday, August 30, 2007
By Rich Lord, Pittsburgh Post-Gazette
State senators faced off with hospitals today in an early round of what could be a lengthy debate on how much nonprofit organizations pay to local governments.
The occasion was a senate fact-finding hearing in Pittsburgh Council Chambers on Act 55, the 1997 law defining nonprofit groups and their payments to governments.
"The act has worked very well," said Thomas Boyle, a lawyer for Buchanan Ingersoll & Rooney who represents hospitals including the University of Pittsburgh Medical Center. "If it ain't broke, don't fix it.
"To me, Act 55 has been a total disaster," countered Sen. Jim Ferlo, D-Highland Park. "The reason you're happy with the status quo is because you guys won out."
Mr. Ferlo said the state should craft a uniform standard governing how much big nonprofit institutions pay to host governments, perhaps based on how much property they own.
Sen. Patrick Browne, R-Allentown, said his Senate Finance Committee may "try to develop what may be amendments, changes, improvements" to Act 55.
Before 1997, municipalities routinely threatened to sue nonprofit organizations to challenge their charitable status if they didn't make semi-voluntary contributions to government coffers.
"They were very public, sort of nasty disputes," said Mr. Boyle. "The effect of the act was like putting oil on water. It stilled the waters."
Mr. Ferlo said he'd rather see municipalities empowered to "go back to court and extract out of you big shots some real income" than to continue with the current system.
In Pittsburgh, Act 55 led to a gradual reduction in payments by nonprofit groups to the city, from $5.1 million a year in 1992 to $600,000 in 2003. In 2005, an umbrella group of charities agreed to pay $13.2 million over three years to help the city during a period of distress. This is the last year of that deal.
Mayor Luke Ravenstahl is trying to extend the agreement, under which some 100 organizations make payments. The organizations have sought to keep the amounts of their payments secret, but documents obtained by the Post-Gazette indicate that UPMC was the largest contributor for 2005, giving $1.5 million. UPMC recently reported a $618 million surplus from their last fiscal year.
City Finance Director Scott Kunka said the city forgoes $57.2 million a year in property, payroll and business taxes due to tax exemptions.
Big nonprofit institutions "need to come up to the plate a little bit more," said acting city Controller Tony Pokora.
First published on August 30, 2007 at 11:34 am
Update: The name of the school is not Shadyside Academy, rather it is Shady Side Academy. This has been fixed.
Good insights came via email, with slight edits:
Shady Side Academy moved its Senior School Campus to Fox Chapel in
1922. School leaders wanted their boys to spend their school weeks in a healthful country environment, then not to be found within the
city limits. The Junior School Campus is located in the Point Breeze section of Pittsburgh and the Middle School campus has always been in Fox Chapel.
I think you could make your case for businesses departing the city with better examples than Shady Side Academy. It's not accurate to say that Shady Side Academy 'departed' the city since one campus is still in the city, the
second (Middle School) campus was never in the city and the third
(Senior) campus moved to Fox Chapel more than 80 years ago.
The examples of Alcoa and North Catholic moving out of Pittsburgh are recent.
Perhaps another example should be put out for discussion:
Consider Pitt Bradford, a 4-year undergraduate educational instutution that is in Bradford, PA -- not Oakland / Pittsburgh.
Pitt Johnstown is another.
These are University of Pittsburgh institutions that are NOT in Pittsburgh. Students get 4-year degrees without ever needing to step foot on Pitt's main campus.
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