Should Pittsburgh’s tax-exempt universities make payments to the city? Here’s what others do.

(Photo illustration by Natasha Vicens/PublicSource)

Other colleges directly contribute thousands – even millions – to their cities each year. But Pittsburgh’s major universities don’t have similar agreements.

 

by Emma Folts, PublicSource

Nearly $14.6 million in cash to Boston. About $8.1 million to Cambridge, Massachusetts. $13 million to New Haven, Connecticut.

That’s how much some universities voluntarily paid their home cities last year, even though they are tax-exempt. But in Pittsburgh, the major universities don’t have similar agreements in place – and the city and county’s fiscal watchdogs are hoping that will change. 

In a report published last month, the Pittsburgh and Allegheny County controllers called on the city and county to negotiate long-term payment-in-lieu of taxes (PILOT) agreements with its major nonprofits, including the University of Pittsburgh, Carnegie Mellon University and Duquesne University. 

More than 90% of the universities’ property is tax-exempt, amounting to a loss of about $52.3 million each year in county, municipal and school district taxes, according to the report. While Pitt and Carnegie Mellon joined UPMC and Highmark last year in pledging to contribute a total of $115 million over five years toward a variety of civic goals through the OnePGH initiative, the controllers argue those contributions don’t go far enough.

Under OnePGH, the city and school district do not directly receive payments from nonprofits, “allowing the burden of financing government and education to fall on residents and local businesses alone,” the controllers’ report states. 

In other cities, universities’ direct, voluntary payments have helped fund municipal services and, in some cases, have allowed cities to address the fiscal effects of properties coming off their tax rolls through university acquisition. It’s unclear, though, whether the major universities in Pittsburgh are willing to enter such agreements with the city or county.

David Seldin, a spokesperson for Pitt, said in a statement that the university “values its longstanding partnership with the city and county and looks forward to engaging with local officials further on this topic.” 

The controllers’ report, he said, is not reflective of Pitt’s contributions to the city and region. The university paid more than $15 million in city and county taxes last year, including employee wage taxes. The university has also invested more than $8 million in the past two years in projects that align with OnePGH’s priorities, including renovations to Pitt’s community engagement centers and the Bigelow Boulevard reconstruction project, he said. 

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