Community forum to pressure Penn to make payments to the city

A coalition of more than 40 city groups plan to rachet up pressure on the University of Pennsylvania to begin making payments to the city in lieu of taxes — starting with a public forum on Saturday.

Philadelphia Jobs With Justice, made up of labor unions, community and student groups and faith-based congregations, has targeted Penn - which like other non-profits is largely exempt from paying property taxes - because it's the city's largest private employer and touts its role as a lead community partner, said Gwen Snyder (no relation to this writer), the group's executive director.

"We feel that Penn should become a leader on PILOTS (Payment in Lieu of Taxes) and start giving back," she said, adding that the group also would like to see other universities and exempt groups give, too.

The group has been circulating a flyer in West Philadelphia, urging residents to come to a forum at 3 p.m. on Saturday at the Monumental Baptist Church at 50th and Locust streets.

"Our neighborhoods are in crisis. Our schools are broke. The city can't afford to plow our streets. Budget cuts are forcing fire station brownouts. Property taxes are skyrocketing," the flyer reads. "The University of Pennsylvania is thriving."

The group noted Penn's $7.7 billion endowment and president Amy Gutmann's $2 million-plus compensation package.

In recent months, the Philadelphia School District's financial crisis has yielded a renewed cry from some corners for Penn, Drexel and La Salle Universities, and other colleges and nonprofits to make PILOT payments to the city as they did when Ed Rendell was mayor and the city needed every penny.

Penn and other local universities have argued against such a move, emphasizing that they already contribute services, expertise, neighborhood upgrades, and scholarships for city students - much more than they would under a PILOT.

Penn also gives up to $750,000 a year to Penn Alexander, a district elementary school in its neighborhood that opened in partnership with Penn in 2001.

Penn, the university has said, also generates more than $170 million in city taxes annually - including $19 million in business taxes, $2 million in real estate taxes on its commercial properties, $9 million in sales taxes, and $144 million in wage taxes from its 31,000 employees.

When Rendell was mayor from 1992 to 2000, the city collected PILOTs from about 50 entities, bringing in about $9 million annually, including nearly $2 million from Penn. It established the PILOT program after a state Supreme Court ruling put pressure on nonprofits to prove their tax-exempt status.

But a 1997 state law made it easier for nonprofits to qualify for exemptions; the city's PILOT program has all but expired.

Discussion was rekindled in some Pennsylvania municipalities after the same court ruled in 2012 that a summer camp could not keep its tax exemption, again shifting pressure onto nonprofits.

Nationally, PILOTs have gained momentum since the early 1990s, particularly in the Northeastern United States, according to a 2010 report by the Lincoln Institute of Land Policy in Cambridge, Mass.

Of eight Ivy League universities, Penn and Columbia, in New York City, are the only two that do not pay PILOTs.

Princeton University and the town of Princeton recently signed a seven-year agreement under which the school will contribute unrestricted donations totaling $21.72 million and one-time contributions valued at $2.59 million to several identified municipal projects, according to the university.

Penn has contended that it cannot fairly be compared with Ivies such as Harvard, which are in cities that, unlike Philadelphia, do not have a wage or business tax. Officials also contend that the university delivers more services to the city today than it did during the voluntary PILOT program.

In Philadelphia, tax exemptions are particularly costly. According to a 2006 study by the Chronicle of Philanthropy cited in Lincoln's report, the value of nonprofits' exempt properties accounted for 10.8 percent of Philadelphia's property value - a higher percentage than any of the other 22 cities studied.

Snyder, Jobs With Justice executive director, said the mayor's office is not part of the effort to get Penn to contribute.

Jobs With Justice does action work around economic justice. It has been around for about 15 years. Saturday's meeting, she said, is only the beginning.

"We're going to push until Penn pays its fair share," she said.