A consortium of the city's largest colleges and universities sent a strongly-worded letter to Pittsburgh Mayor Luke Ravenstahl, saying his decision to sue nonprofit giant UPMC has endangered the relationship between the city and institutions of higher education.
In the letter, the Pittsburgh Council on Higher Education said the lawsuit, along with state legislation that would force nonprofits to pay payroll taxes, has created an "adversarial environment" for a nonprofit task force convened by the mayor in January. All of the council's member institutions -- including University of Pittsburgh and Carnegie Mellon University -- have representatives appointed to the task force.
Ken Service, the council's executive director, stressed that colleges and universities have no intention of pulling out of the task force yet. They simply believe the task force should be postponed "until some of these other outside issues could resolve themselves so we could have an better environment to discuss these overall issues."
A state overseer, the Intergovernmental Cooperation Authority, required the mayor to create the nonprofit task force as a condition for approving the city's budget. The task force is mandated to produce a report by the end of June.
Marissa Doyle, spokeswoman for the mayor, responded with an emailed statement.
"We hope that all nonprofits will work in cooperation with the ICA-mandated Nonprofit Taskforce, and we look forward to reviewing the results of the Taskforce's efforts," she wrote.
While the expressed purpose of the task force was to study nonprofits, the ultimate goal was to hammer out an agreement for voluntary payments from some of the organizations, which do not pay taxes. The city currently receives $2.6 million in voluntary payments from an group of nonprofits through the Pittsburgh Public Service Fund, but the city's accord with the group expires this year. According to the letter, the Council on Higher Ed's member institutions provide "the single largest block of voluntary contributions" to the fund.
The institutions also represent some of the county's largest nonprofits, owning more than a billion and a half dollars in tax-exempt real estate.
"[We] believe that we have no choice but to focus on the litigation and legislation that has targeted us, rather than investing in the conversation that had been anticipated when the task force was created," the letter said. "As past efforts have shown, making progress on these longstanding issues is difficult even in the best of circumstances, and it actually would seem to be counter-productive to try to push forward in the adversarial environment that exists today."
In the letter, the council said it hoped to broaden the scope of the task force to include "a constructive dialogue regarding the long-term financial strength of the city."
It wanted the dialogue to include the city's burgeoning pension obligations and the imposition of a tax on those who commute to the city.
Service, the executive director for the council, said the goal was to help the city become financially stronger so it would no longer seek payments from non-profits.
"The ultimate solution is not to look at another source of funding, but rather looking at the financial stresses of the city," he said. "Maybe there are some approaches that would reduce the need for funds."
Moriah Balingit: email@example.com, 412-263-2533 or on Twitter @MoriahBee. First Published April 9, 2013 4:00 AM