City Council had no choice. City Council did not "refuse" anything. City Council had to do what it did. City Council needed to call for a public hearing -- and that is what happened.
It was the citizens who refused to let the side-line deal with the city and UPMC pass concerning the Pittsburgh Promise. The refusal was our, the citizens. Refusal was NOT a good description of what council wanted to do.
Had city council had its way, the deal for tax credits would have passed. Folks on council are still trying to rush the public hearing. They'd love to play the refusal role -- by refusing to allow the citizens to exercise rights to demand public hearings.
The desire to study the resolution is not that of council. Rather it is of the citizens.
A women, citizen, parent, spoke to council on Tuesday. She demanded a full discussion and public hearing. And, she has a child in the 12th grade of Pgh Public Schools. She has the most at risk. The first tuition payment for he soon to be college freshmen would be expected in a few months. However, she wants accountability. She wants to have an open process. She wants to live in an honest city. She wants what is best for the region -- greater than her own self interest of getting a $5,000 check in eight months.
Pittsburgh Council balks at Promise qualifier - Pittsburgh Tribune-Review Pittsburgh City Council refused to be rushed into granting UPMC potential tax credits Tuesday despite political pressure from Mayor Luke Ravenstahl to reward the hospital giant for jump-starting a scholarship program for city school graduates.
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full article in the Trib:
Pittsburgh Council balks at Promise qualifier
By Jeremy Boren
TRIBUNE-REVIEW
Wednesday, December 19, 2007
Pittsburgh City Council refused to be rushed into granting UPMC potential tax credits Tuesday despite political pressure from Mayor Luke Ravenstahl to reward the hospital giant for jump-starting a scholarship program for city school graduates.
City lawmakers demanded a delay and public hearing after some said they felt blindsided by Ravenstahl's proposed resolution to prevent the city from taxing UPMC up to $100 million over the next 10 years if the Legislature changes state law to allow nonprofits to be taxed.
The move triggered a rare rebuke from Ravenstahl's top aide, Chief of Staff Yarone Zober.
"It would be unfortunate if the actions of a few council members has the effect of preventing the class of 2008, those 3,000 seniors, from participating in The Pittsburgh Promise," Zober said.
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Ravenstahl said in a statement that he understands City Council's desire to study the resolution.
"I am confident that City Council will do their part in making (The Pittsburgh Promise) a reality," he said.
UPMC general counsel Robert Cindrich defended UPMC's request. The city still would have the option to collect the Legislature-approved taxes from the nonprofit, but UPMC would reduce its donation to the Pittsburgh Promise proportionally, he said.
"We shouldn't look a gift horse in the mouth," Cindrich told council members during a heated debate. "(This is) the only condition that UPMC has asked for. ... We will give $100 million. Please don't ask us to give it twice."
Councilwoman Darlene Harris said gifts are not supposed to come with strings attached.
"A donation or a gift is not a payment, it's a gift," she said. "When I donate to my church ... I give with my heart, because I want to donate."
The Pittsburgh Promise is modeled on a scholarship program in Kalamazoo, Mich., which has credited the program with reversing its population decline. Donors to the Kalamazoo Promise have remained anonymous and have not asked for tax credits in return, officials there said.
"UPMC seems to be confusing charity with extortion because they're saying, you won't get The Pittsburgh Promise money if you don't give us tax amnesty," Jeanne Clark of Squirrel Hill told City Council.
"If you let this legislation pass into law you are abdicating your responsibilities as elected officials," Regent Square resident Barbara Daly Danko, who has a son set to graduate from Schenley High School, told council members. "Backroom or back-nine deals are not acceptable to the public and should not be acceptable to you."
Council President Doug Shields said the resolution introduced Monday "may not even be legal" and scolded UPMC and Ravenstahl for not revealing the stipulation on Dec. 5, when UPMC announced its support for The Pittsburgh Promise.
"It's not the council that you didn't tell, it's the people of the city of Pittsburgh that you didn't tell on Dec. 5 that there are side deals here," Shields said.
"I think you owe an apology to the people of Pittsburgh," he told UPMC officials.
Councilman Bill Peduto said City Council hasn't been given enough time to debate the resolution.
"For so many reasons this is just plain wrong," Peduto said. "UPMC must do the right thing. Support The Pittsburgh Promise, but don't ask the taxpayers to provide a tax credit for it."
There appears to be no move in the Legislature to authorize taxes on nonprofits; however, some politicians, including City Council members, have sought that authority.
Greg Mahon, executive director of the state Senate Committee on Urban Affairs & Housing, said financially distressed cities across the state, including Pittsburgh, have long sought to tax nonprofits that occupy significant swaths of otherwise-taxable land.
"It's something that we see as a tool that (cities) probably could have or should have," Mahon said on behalf of the committee's chairman, state Sen. John Pippy, R-Moon. Mahon said Pippy will continue to study the problem with a series of finance summits next year.
Property taxes are Pittsburgh's biggest revenue source, producing about $121 million a year. Acting City Controller Anthony J. Pokora has estimated that if UPMC paid property tax, the city would gain $8.3 million a year.
UPMC -- Western Pennsylvania's largest employer -- has said it will give The Pittsburgh Promise $10 million to help the class of 2008 attend Pennsylvania public, private and trade schools after graduation. The health system pledged up to $90 million over the following nine years in matching funds.
UPMC posted a record $618 million profit last year.
Taxes UPMC currently pays would not be affected if the resolution eventually passes, Cindrich said, estimating UPMC has paid Pittsburgh $25 million in lieu of taxes since 1986 -- including $1.5 million a year UPMC gave to the Pittsburgh Public Service Fund, a group of nonprofits that agreed to give the city $4.5 million a year from 2005 through 2007.
Cindrich said UPMC, the fund's biggest donor, won't contribute next year -- casting doubt on whether the city will be able to raise the $4.1 million a year it expects to receive from nonprofits each year through 2012.
Direct taxes UPMC pays include property taxes on for-profit doctors offices owned by UPMC and the city's 45 percent parking tax, Cindrich said. He argues that UPMC will pay property taxes, indirectly, when it relocates its corporate headquarters to five floors in the U.S. Steel Tower.
UPMC and the Pittsburgh Foundation, which is managing The Pittsburgh Promise, declined to release the contract governing the scholarship program.
The Pittsburgh Public Schools board is expected to discuss the tax-waiver proposal at its meeting tonight. UPMC has warned it will not contribute to The Pittsburgh Promise unless City Council and the school board approve the tax exemption.
Jeremy Boren can be reached at jboren@tribweb.com or 412-765-2312.
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