Penn professors call for university to pay taxes to support Philly schools

More than 500 faculty and staff members at the University of Pennsylvania have signed a petition calling on the school to make payments in lieu of taxes supporting the Philadelphia public schools — a campaign that has escalated in light of national protests demanding attention to racism and inequality.

“Every institution in our society must address the root causes of racial inequality, which include systems of public finance that enrich wealthy, private, majority-white institutions while underfunding public institutions and public services,” reads the petition, which professors said was delivered Wednesday to the university’s board of trustees.

The petition said the issue was “not a matter of charity but of justice.”

Like other nonprofit institutions in the city, Penn is exempt from paying property taxes. But the university has for years faced calls to voluntarily make payments in lieu of taxes.

Proponents of a PILOT agreement cite resource gaps in the city’s public schools, which enroll primarily low-income students. With school funding in Pennsylvania tied heavily to local property taxes, activists say nonprofits like Penn should be contributing.

» READ MORE: $29.6 billion of Philly real estate is exempt from property taxes. Should nonprofits be asked to pay up?

Those involved with the petition say the effort has gained steam in light of the protest movement sparked by George Floyd’s death.

With calls in Philadelphia and nationally to address racial disparities, “we recognize that Penn has to rise to the occasion,” said Amy C. Offner, an associate professor in the university’s history department. “Unfortunately, Penn is contributing to racial and economic inequality in the city.”

A university spokesperson did not respond to a request for comment Wednesday.

David L. Cohen, president of the university’s board of trustees, said in an email Wednesday that “Penn’s position against PILOTs, based on the unique characteristics of Philadelphia’s tax structure and Penn’s enormous contributions to the city and to education, has been made clear over the years. The petition only rehashes prior arguments and Penn’s position has not changed.”

Penn officials have previously noted that cities like Boston — where nearby Harvard University makes PILOT payments — do not have a wage or business tax, as Philadelphia does.

Along with other universities, colleges, and nonprofits in the city, Penn made PILOT payments during Ed Rendell’s tenure as Philadelphia mayor in the 1990s. But the city’s program expired after a court ruling that made it easier for nonprofits to gain exemptions.

The faculty and staff petition began circulating in mid-June. Some who signed “want to return to a tradition that’s been lost at Penn,” Offner said, referring to the university’s history of making PILOTs.

While demands for Penn to make the payments aren’t new, “faculty and staff have largely been absent from past calls,” Offner said. “What’s clear right now is there’s more support than ever before, and it’s coming from all quarters.”

The petition notes that “nearly every other Ivy League university” already makes PILOTs, and contrasts Penn’s wealth — “the seventh richest university in the country” — with Philadelphia’s status as the poorest of the 10 largest U.S. cities.

“Penn has a duty to contribute to the city that sustains it,” the petition says — one that it argues goes beyond targeted programs, like the university’s support of the Penn Alexander School or investments in University City.

Offner said petitioners support a proposal by the Philadelphia Jobs with Justice advocacy group for Penn to pay 40% of what it would owe in property taxes, if it were not tax-exempt. They estimate that would have meant $36.4 million in 2016-17. The Philadelphia School District’s budget for next year is about $3.5 billion.

Given district estimates that it could cost $125 million to remove environmental hazards from school buildings, “this very modest expense for Penn would make a significant difference to the students, teachers, and staff in our public schools,” a website supporting the petition reads.

It calls for Penn to spend a greater share of its endowment — raising the rate from 5% to 7%, the maximum allowed by Pennsylvania law — as well as reducing salaries for highly paid administrators, and considering borrowing to generate more money.

Like other institutions, Penn has been facing scrutiny in light of the recent protest movement. The university last month said it would commission a study of its police force and withdraw funding to the city police foundation after a petition calling for an end to a campus “police state” drew thousands of signatures.