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Nonprofits to cut payments to Pittsburgh budget
Monday, February 16, 2009

The city of Pittsburgh expects to get less money from nonprofit institutions than it did from 2005 through 2007, officials said at a special meeting of city council today.

Finance Director Scott Kunka told council that there is a draft agreement between the city and the Pittsburgh Public Service Fund, an umbrella group of medical, educational, philanthropic and cultural institutions.

"There is an internal number that has been bandied about," said Mr. Kunka, refusing to provide it. "Let me say we are disappointed with the amount they are willing to contribute over the next three-year period."

The fund gave nearly $14 million over three years, with the final payments coming in last year, but applicable to 2007. There will be no nonprofit payment for 2008.

The Rev. Ron Lengwin, spokesman for the Catholic Diocese of Pittsburgh and for the fund, said in an interview that a draft agreement has been in the city's hands for "months," and if it was completed promptly, there could have been a payment for 2008.

"They have to approve the agreement that was drafted. We had reason to believe that everyone was OK with that draft," he said. "We're waiting for them to sign the agreement."

The agreement is modeled on one reached in 2005 that bars the city from trying to tax the nonprofit agencies that are making voluntary contributions to the city.

Father Lengwin confirmed that the payment for 2009 through 2011 would be lower than that made during the prior agreement, but wouldn't provide the amount, saying it could still change.

"We've been through a lot of financial crisis," he said. "We're not releasing that amount until we actually have an agreement."

The city's long-term plan counts on receiving around $4.3 million from nonprofit entities, which includes around $800,000 that is not part of any Pittsburgh Public Service Fund agreement. Any reduction in nonprofit contributions would come on the heels of Gov. Ed Rendell's proposal to cut the state's subsidy to the city from $6 million to $3 million.

The city can't tax the property or payrolls of institutions the state considers not-for-profit, exempting them from two of the three biggest city levies. A 2007 city controller's office audit found that eight institutions of higher learning and 14 health-care concerns owned $3 billion in untaxed property, on which they would otherwise have to pay $32 million in property taxes.

"The non-participation by the non-taxed community is disappointing," said Council President Doug Shields.

The special meeting is one in a series designed to influence a new long-term recovery plan to be written under state Act 47.

More details in tomorrow's Pittsburgh Post-Gazette.

First published on February 16, 2009 at 1:14 pm