One way or another, big tax-exempt institutions and commuters from the suburbs must pay more for the services they get from the city of Pittsburgh, Mayor Luke Ravenstahl said today, outlining his newest strategy in what is now a month-old revenue push.
The mayor spoke with the Post-Gazette editorial board two days after he went before city council to endorse a new recovery plan that calls for taxes on those who work in the city, and extension of a payroll levy to include big educational and medical institutions. As alternatives if the state Legislature doesn't authorize those items, he outlined proposed surcharges on all-day parkers, hospital admissions and undergraduate students that he thinks the city can impose without state approval.
"As we see the reductions [in voluntary contributions] continue, and not meet what we need, this is our alternative," he said of the surcharges. A move toward fees "potentially would be the best way to compel the nonprofits to come to the table.
"If they have other ways to [aid the city], we're more than willing to do it," he added.
The area's largest tax-exempt institution, the University of Pittsburgh Medical Center, responded that its contributions to the city's dynamism are already huge.
One-third of UPMC's revenues come from its for-profit components, which pay "more than $24 million in parking, property and business taxes," said Frank Raczkiewicz, UPMC's director of media relations, in a written response to questions. The hospital system also has pledged $100 million to the Pittsburgh Promise of tuition aid to public school graduates, which has "a huge multiplier effect when it comes to housing values and the desirability of Pittsburgh as a place to live."
The health system also has been the biggest voluntary contributor to the city's coffers in recent years.
More than 100 tax-exempt institutions joined together in 2004 and paid the city around $14 million total from 2005 through 2007. Their umbrella group, the Pittsburgh Public Service Fund, recently offered $5.5 million total for the years 2008 through 2010 -- a proposal city council has effectively ignored.
A proposed new recovery plan under Act 47 for distressed municipalities calls upon the city to somehow get $6 million a year from tax-exempt institutions, but Mr. Ravenstahl said that state law gives it little leverage in negotiations for voluntary payments.
The administration believes it may gain leverage from its position that it can impose new fees -- $25 per hospital admission to generate $5 million, and $50 per semester for undergraduates to raise $3 million.
His preferred alternative -- extending an existing payroll tax on businesses to include big tax-exempt institutions -- requires General Assembly approval. So does his desired boost in the $52-a-year tax on everyone who works within the city limits to $145.
"I could make the argument today that $52 a year from a person who works in the city is not enough for what we provide them," Mr. Ravenstahl said, noting that the estimated attendance at Monday's Penguins victory parade, for which the city provided public safety and public works services, exceeded the city's population.
If the administration can't win state approval to hike the $52 levy, a $5 additional charge on all-day parkers at Pittsburgh Parking Authority garages is an option, Mr. Ravenstahl said.
The administration is continuing talks with City Council on possible changes in the Act 47 plan, but Mr.Ravenstahl said he wouldn't expect theAct 47 coordinators to approve major changes.
More details in tomorrow's Pittsburgh Post-Gazette.
Rich Lord can be reached at firstname.lastname@example.org or 412-263-1542.