Philadelphia PILOTS Steam Ahead … To An Uncertain Port

by Tony West

An effort to recover revenues from large nonprofit institutions in Philadelphia sailed through City Council yesterday. With a 15-1 vote it passed a resolution written by Councilman at Large Wilson Goode, Jr. “calling on the Nutter Administration to pursue PILOTs (payments in lieu of taxes) or voluntary contributions from large nonprofit institutions to address the City’s school-funding crisis.”

JOBS WITH JUSTICE’S Gwen Snyder won over City Hall. How will her PILOT idea fare on Capitol Hill? Solidly in Democratic 27th Ward Leader Carol Jenkins’ corner in her race for City Commissioner were Jobs With Justice Exec. Dir. Gwen Snyder, Walnut Hill Community Association President Horace Patterson, Jenkins and nonprofit leader Andy Toy, at fundraiser hosted by Mary Goldman in W. Phila.

Goode’s resolution was a response to a campaign by Philadelphia Jobs with Justice, a labor-backed action committee that has been targeting the giant educational-medical complexes that increasingly dominate the city’s business life. The fact they are nonprofit exempts them from most real-estate and business taxes. This places a disproportionate burden on for-profit businesses to fund municipal services that large “eds-and-meds” operations enjoy at no cost.

“We’ve been fighting for mega-nonprofits to pay their fair share since 2013,” stated JwJ Exec. Dir. Gwen Snyder. “We are grateful to have had the opportunity to work so closely with Councilman Goode on this resolution, and we’re thrilled to see Council recognize it’s time for nonprofits like the University of Pennsylvania and Jefferson contribute to our city schools and services, just like the rest of us. It’s unconscionable that they aren’t already, given the state of our school system.”

Stirring though it sounds, Goode’s resolution will remain only a wish for now. In 1997, the Pennsylvania General Assembly passed Act 55, which broadened the tax exemption for nonprofits. All institutions that had been making PILOT payments immediately dropped the practice.

But a 2012 State Supreme Court ruling opened the door to taxing commercial operations inside such nonprofits. Hospitals’ and universities’ Byzantine bookkeeping can make it hard to determine which activities make money and which kinds of money-making constitute “profits”.

Snyder says the “mega-nonprofits” are working in Harrisburg to amend the State Constitution to prevent cities from creating PILOT programs.

There’s a reason we haven’t been hearing from mega-nonprofits in City Hall–they’ve been busy in Harrisburg. These billionaire nonprofits are working to amend the state constitution to prevent cities from creating PILOT programs. Any move to prevent a new form of taxation is usually popular with Republicans, whose majority in the General Assembly is commanding. So this amendment could be on the November ballot.

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