Two Philadelphia council members are pushing for changes that could potentially open the door for a payment in lieu of taxes (PILOT) program in the city.
According to The Philadelphia Inquirer, Councilwoman Blondell Reynolds Brown started the push by calling for a hearing on property tax exemptions for nonprofits in Philadelphia. The city holds nearly $13 billion in exempted property -- 10 percent of the total market value -- making it a prime candidate for PILOTs.
In addition to the hearing, which is to be held sometime this spring, Councilman Bill Green introduced legislation that would require nonprofits to prove they deserve their tax exemptions and would identify programs that should pay business taxes.
Some of the city's nonprofits are not greeting this news with open arms particularly hospitals, which would stand to pay $112 million in taxes if they were not exempt. Curt Schroder, regional executive for the Delaware Valley Healthcare Council, told The Inquirer that he is "concerned" about the discussion and hopes the council doesn't end up implementing a PILOT program.
Though Philadelphia nonprofits might not like them, PILOT programs are common in the United States. They typically arise in cities with vast hospital systems and universities such as Providence, R.I., which recently agreed to a deal with Brown University to receive doubled payments from the college. The biggest recipient of PILOTs is Boston, which collected $19.4 million from nonprofits in 2012.
In addition, a study by the Johns Hopkins University Center for Civil Society Studies featured last year in The NonProfit Times revealed that 63 percent of nonprofits reported paying fees or taxes to local governments.
You can read the full story in The Philadelphia Inquirer.