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Tax-exempt groups to keep donating to city
Tuesday, October 02, 2007

The city of Pittsburgh's budgetary pledge drive reached its first milestone yesterday, when a consortium of tax-exempt organizations announced its agreement to make contributions to city coffers for another three years.

That begins to erase a big question mark from Mayor Luke Ravenstahl's fiscal plan, which counts on $4.3 million in contributions from the organizations next year and $4.1 million annually after that. Still uncertain, though, is how much they'll end up paying.

The board of the Pittsburgh Public Service Fund voted last week to draft a new contract with the city, said fund chairman and spokesman the Rev. Ron Lengwin, who also is spokesman for the Catholic Diocese of Pittsburgh.

If the fund and city agree to a contract similar to the one that expires at year's end, he said, the fund will reach out to its 100-plus members, which include colleges, universities, hospitals, foundations and arts groups.

"We will contact those who had contributed to the fund in the past to contribute again," he said. "I can't tell you how many will decide to participate, whether it will be over 100 or 10."

Father Lengwin said the size of the donation will depend on how much each organization can afford to give. The fund pledged to give a total of $13.25 million for 2005, 2006 and this year, and is still collecting the 2007 pledges.

The state-appointed Intergovernmental Cooperation Authority, which must approve or reject the city budget by Oct. 20, wants "to see a dollar amount," said Barbara McNees, its chair. But the ICA could issue a conditional approval without a final dollar figure, she said.

Mr. Ravenstahl issued a statement saying he was "thankful" for the fund's decision.

Other officials said they want a longer-term solution to the erosion of the tax base as tax-exempt entities expand.

"We can't operate government out of a tin cup," said Council President Doug Shields, arguing that the state should set rules requiring contributions by tax-exempt groups.

Acting Controller Tony Pokora called the prospect of a three-year deal to give whatever the organizations can afford less than ideal. "I'd rather see something more concrete -- a formula based on maybe the amount of tax-exempt land they control, and a dedicated source of revenue for years to come."

Father Lengwin said the fund expects to continue to demand quarterly state verification that the city is in compliance with its recovery plan, and to keep the amounts given by each organization confidential.

The Post-Gazette learned that the biggest contributors in 2005 were the University of Pittsburgh Medical Center at $1.5 million, Highmark Inc. at $1 million, and the University of Pittsburgh at $800,000.

First published on October 2, 2007 at 12:00 am
Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.