Taxing nonprofits

The county doesn't serve them so why should it tax them?

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In these difficult economic times it has become tougher and tougher for government at all levels to maintain an adequate level of services while keeping budgets balanced. The result has been that our elected leaders, in an attempt to hold the line on taxes, seek new, often troublesome sources of new revenue.

Taxes on gambling and the sale of cigarettes and alcohol recently have been enacted or increased by the state. The city has proposed new charges on college students. And our Allegheny County Council wants to supplement the county budget with a new fee on our nonprofit organizations.

Seeking revenues from tax-exempt organizations is nothing new to Pittsburgh. The city, home to several billion-dollar nonprofits, has worked long and hard to extract assistance from these large landowners to offset the significant cost of city services that they generate. I myself have suggested that nonprofit employers pay a reduced payroll preparation tax.

That said, our universities and hospitals are good neighbors who not only provide quality jobs in our community but also provide excellent service through their core missions and civic involvement. Their contributions cannot be overlooked when discussing the level to which they should further contribute to our local government. That additional contribution should be commensurate with the services they receive.

Last week the Allegheny County Council passed a proposed fee on nonprofit organizations for the services the county provides them. County Executive Dan Onorato vetoed the proposal but the council, having approved it unanimously, is expected soon to take up an override vote.

County Councilman Charles McCullough, the sponsor of the bill, noted the significant amount of tax-exempt property in the county (25,000 parcels) and the "cost of providing services to them like fire and police protection and public works."

What Mr. McCullough and his colleagues failed to mention is that those 25,000 parcels represent a mere 4 percent of all county parcels and that most of the tax-exempt property in the county is owned by the government. Additionally, the service the county provides to nonprofit institutions is minimal. First responders to public safety emergencies at these facilities are most often the public safety personnel of the host municipality, not the county. Mr. McCullough's contention that the county provides significant police and fire protection to these institutions is laughable. While it is not clear how many nonprofits are located on county-maintained roads, I suspect it is a very small number.

As controller of the city of Pittsburgh, I certainly understand the desire to shake every tree to harvest new revenues. But our county leaders need to recognize that any fruit left hanging on tax-exempt trees should fall first to the municipalities that actually work the orchard.


Michael E. Lamb has been Pittsburgh's controller since January 2008 ( www.city.pittsburgh.pa.us/co /).


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