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Local colleges respond to reports that they don't pay PILOTs by planning study on why they shouldn't pay PILOTs

Just because you're a non-profit doesn't mean you don't have any money. Cities know this, and around the country, several are turning to non-profits to help out with difficult financial situations.

Boston Mayor Thomas Menino, for instance, is pressuring the city's nonprofits to contribute 25 percent of what they would owe in taxes if they weren't tax exempt.

And Pittsburgh's mayor recently succeeded in getting local colleges to pay into city coffers by threatening to tax college tuitions.

Philly nonprofits would appear to be a ripe target for this sort of pressure. As we reported two months ago, Philadelphia is taking in only a paltry $700,000 a year through its payments in lieu of taxes, or PILOT program, which encourages nonprofits, which have tax-exempt status but use city services, to give the city money.

But it doesn't look like Philly is ready to take as hard a line on this issue as some other municipalities.

After our report a panel of local college presidents affiliated with the Greater Philadelphia Chamber of Commerce convened to write a report outlining what services and economic benefits they already provide to the city.

In other words, an explanation of why they shouldn't pay PILOTs.

Barbara Saverino, vice president at the Chamber, says she expects the study will come out in the fall and focus on the economic impact that higher education institutions have on the region. A previous study, released in 2007, focused on the number of jobs the colleges provide, the amount their students spend and the capital investments they make in their neighborhoods. It found that Delaware Valley colleges spent $12.3 billion in operating expenses, and students pumped about $2.2 billion in the local economy.

The report will be published by Select Greater Philadelphia, an arm of the Chamber, and Saverino says the results will be shared with the administration and other stakeholders.

Lori Shorr, Nutter's chief education officer, says the mayor is going to wait for the results of the report before making any decisions on the PILOT program. She points out that some large institutions, like colleges, provide services to their neighborhoods by responding to 311 calls. And schools like Penn, Drexel and Temple have their own police.

These are good points – but it's also true that Boston University has its own police force, and still contributes $4.9 million under its city's program. After all, these big schools still rely on the Streets Department to maintain their roads and the Fire Department to put out fires.

The city's actual recourse is somewhat limited, since the state passed a law in 1995 that clarified rules of tax exemption; as a result, most local nonprofits declined to participate in any PILOT program. But there are ways the city can apply pressure to encourage contributions.

What do you think? Should the administration take a harder line on PILOTs?

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