Tag Archives: 2011 Allegheny County budget

Does County Have a Non-Profit Commitment?

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It may be a small (perhaps miniscule is a better way to term it) piece but in the 2011 County budget there is $4 million in non-profit contributions that some on Council have labeled "phantom revenue".

That’s because there is no assurance the money is coming other than a prediction by administration officials that it will be there. That echoes what was said earlier this year. As of September it was reported in print media that "no deal has been reached to provide those funds, but [the County Executive] pledged that an agreement would be signed by year’s end and the money would be available for 2011. He declined to identify any of the non-profits with whom his administration is talking."

It is not clear if it is one non-profit or a group of non-profits, whether the contributor(s) carries out services in communities not including the City of Pittsburgh or if there is overlap between City and non-City locales, or if the $4 million is for a specific service(s) the County provides or if the money is restricted or targeted in its use.

If the County’s agreement does come through it will be quite a coup given the often contentious climate between non-profits and local government in the region. Recall that just a year ago the City attempted to impose a tuition tax after other fees aimed at non-profits fell through. The County Executive noted at the time that there were better ways than a legal fight to gain the support of non-profits. In addition, non-profit payments to the City have fallen from the 2007 audited amount of $5 million or so.

If the deal does not come through then there will be scrambling to locate another source of funds to make up for the shortfall.

Phantom Revenue, or a “Ghost of Bad Budget Decisions” Past?

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Next year Allegheny County hopes to get $4 million in revenues-officially termed payments in lieu of taxes-from non-profit organizations. A likely bet is that the non-profits targeted by the County will be hospitals and universities, both inside and outside of the City of Pittsburgh as the County covers the City’s boundaries.

The County’s desire to get non-profit money for next year should not come as a surprise. It was mentioned at this time last year that the County would seek $4 million. The County Executive made a distinction at the time between the County’s request and what was shaping up to be a battle in the City over the proposed tuition tax. "These are two separate issues…the city budgeted [for the revenue through nonprofits]. I didn’t budget for it at all; it’s not in my budget until 2011." The County Council president added that "we don’t come at this with any level of leverage. The city tried their approach, but we have been focusing on a much different style,"

And what different style would that be? The 2011 budget is here, but there is no type of agreement with non-profits on paying the $4 million. "No deal has been reached to provide those funds, but Mr. Onorato pledged that an agreement would be signed by year’s end and the money would be available for 2011" was what one newspaper report noted. How long before we hear claims about how rich non-profits are not doing their civic duty to help the County out in difficult times?

Target a revenue source, place it in the budget, and work out the details later: that’s not in the spirit of good governance.