Sometimes the press calls for nonprofits to “contribute” to municipal finances given many cities’ long running fiscal debacles. The Philadelphia Public Record doesn’t pull any punches. Tax ‘em, it says in no uncertain terms: “Before the City figures out its new property-tax rate, it needs to tax all the property it’s supposed to tax. And that includes property owned by nonprofits.” The Record characterizes the colleges and hospitals (but not the churches) that dominate in nonprofit land ownership as “nonprofit enterprises.” “A hospital needs streets and sewers, teachers and cops just like a cookie factory does,” the Record’s editorial states. “But the factory pays taxes to support these public services; nonprofits don’t.”
The interesting twist in Philadelphia is that part of the nonprofit sector appears to be lining up in favor of taxing the “eds and meds” and perhaps other tax-exempt property owners. The Record cites Philadelphia Area Jobs With Justice (JWJ) Executive Director Gwen Snyder, who opines, “When a university like Penn buys a hotel and runs it for profit, or a hospital lets land lie vacant and undeveloped—then, Mayor Nutter is legally obligated to collect property taxes.” The Record calls on the Nutter administration to “be aggressive” in quickly negotiating “proper PILOTs” with tax-exempt property owners.
It may be that the Record’s editorial writers and other advocates for taxing the tax-exempts have read the substance of the new report from the Lincoln Institute of Land Policy tabulating what it says is the extent of PILOTs collected by municipalities around the nation. According to the Lincoln Institute, at least 218 local governments collect PILOTs of some sort, amounting to a collective annual value of $92 million (the Lincoln study surveyed 600 municipalities with the largest nonprofit sectors).