Friday, March 14, 2008
Who’s setting the Example?
Pittsburgh’s Urban Redevelopment Authority (URA) has just approved its latest budget. The Authority will spend $10.8 million this year, up from $7.8 in 2007. The director notes that the new budget is balanced and requires no borrowing. But what is significant in this budget is that for the first time in many years the URA sending $1.5 million to the City as a “payment in lieu of taxes” (PILOT) which the chairman of the board says “is a way to also encourage the rest of the non-profit community to do their part, as they’ve been doing for several years”.
For years the City has been decrying land holdings from the non-profit community, especially those of the hospitals and universities. As the City sank into financial distress a large amount of blame was directed at these nonprofit entities. But as a 2003 Allegheny Institute report notes “the market value of exempt property held by government and government related agencies increased an average of 57 percent from 1993 to 2003.” This growth rate was in fact faster than that of the market value of hospitals, universities and churches which had increased by 55 percent (Tax Exempt Property in the City of Pittsburgh: 1993-2003. Report # 03-01: www.alleghenyinstitute.org/reports).
Yet when the City entered financial distress status in 2004, it was the non-profit community who increased their PILOT contributions to the City to help them out—while the URA and other City authorities sat by. For years the nonprofit community had been making PILOTs to the City of around $2 million which increased to $5.7 million in 2005 and are now running at about $4.2 million. Now the URA makes a contribution and claims to be leading the way? If they want to lead the way help out the City they should start selling off properties and returning them to the tax rolls. They should also stop pushing government driven economic development projects such as tax increment financing, and let the market take over. Getting out of the way may be the best thing the URA can do for the City.
For years the City has been decrying land holdings from the non-profit community, especially those of the hospitals and universities. As the City sank into financial distress a large amount of blame was directed at these nonprofit entities. But as a 2003 Allegheny Institute report notes “the market value of exempt property held by government and government related agencies increased an average of 57 percent from 1993 to 2003.” This growth rate was in fact faster than that of the market value of hospitals, universities and churches which had increased by 55 percent (Tax Exempt Property in the City of Pittsburgh: 1993-2003. Report # 03-01: www.alleghenyinstitute.org/reports).
Yet when the City entered financial distress status in 2004, it was the non-profit community who increased their PILOT contributions to the City to help them out—while the URA and other City authorities sat by. For years the nonprofit community had been making PILOTs to the City of around $2 million which increased to $5.7 million in 2005 and are now running at about $4.2 million. Now the URA makes a contribution and claims to be leading the way? If they want to lead the way help out the City they should start selling off properties and returning them to the tax rolls. They should also stop pushing government driven economic development projects such as tax increment financing, and let the market take over. Getting out of the way may be the best thing the URA can do for the City.
