The city of Pittsburgh on Tuesday began new dialogue with nonprofits to develop a system for payments in lieu of taxes (PILOTs). The move was urged by state officials.
Pittsburgh becomes the latest city, following the example of Portland, Maine, to attempt to get payments from nonprofits. It comes after Pennsylvania's Intergovernmental Cooperation Authority (ICA) approved the city's 2013 budget and five-year plan, according to a report in The Pittsburgh Post-Gazette. The plan was approved on the condition that Pittsburgh Mayor Luke Ravenstahl form a task group on nonprofits by Dec. 31 and report on its findings by June 30.
In a letter to Mayor Ravenstahl, ICA chairman Dana Yealy wrote that the task force should examine how other cities handle PILOTs and make recommendations as to how much nonprofits should contribute in a similar program in Pittsburgh. In a statement, Ravenstahl thanked the ICA for "supporting the city's ongoing efforts to receive fair nonprofit payments."
The meetings of the task force must be public, wrote Yealy, and he added that the ICA reserved the right to rescind approval of the city's $469 million budget if Pittsburgh doesn't comply with the directive.
This is not Pittsburgh's first experience with PILOTs. The approval of the city's 2012 was briefly rescinded after there was concern that not enough was being done to get payments from nonprofits. The Tuesday directive by the state was motivated by the fact that the city's largest source of nonprofit contributions -- the Pittsburgh Public Service Fund -- is set to expire at the end of 2013. The city anticipates around $2.6 million from that fund this year, though the amount contributed by nonprofits is not disclosed, something Yealy wants changed with future PILOT agreements.
The fund is the largest source of funds from nonprofits, but the city also has some private contracts in place, including agreements with 10 to 20 nonprofits that were just renewed. Those agreements will net the city $450,000 to $500,000 this year.
You can read the full story in The Pittsburgh Post-Gazette.