Eds, meds, taxes fuel protest

WHEN ADRIAN Rios arrived in Philadelphia nearly four years ago to begin his studies on the ivy-clad campus of the University of Pennsylvania, the East Los Angeles native was increasingly drawn to political issues, from the plight of Palestinians to a labor fight involving Penn's cafeteria workers.

But most of his classmates stayed on the sidelines.

That's why it was a life-altering experience - "exciting and nerve-racking," he recalls - last month when he found himself amid about 100 student protesters lying on the floor of a large, heated tent in a protest at Penn president Amy Gutmann's house.

Under white Christmas lights, the students staged a 4 1/2-minute "die-in" and verbally confronted Gutmann, disrupting her annual holiday party.

"We felt powerful," said Rios, a senior international-relations major. "It's hard to imagine a bunch of 18-to-22-year-olds telling the multimillionaire president of one of the best and richest schools in the world that 'this is not OK.' "

At a time when protest and political activism have returned to campuses around Philadelphia and across the nation on a scale that echoes the tumultuous days of the 1960s, the cause that currently animates Rios and his cohorts is an unusual one - something called "PILOTs."

That stands for "payments in lieu of taxes," and the young activists of SLAP - the Student Labor Action Project - are demanding that their university cough up $6.6 million to help pay for Philadelphia's cash-strapped public schools, part of a broader push to force all of the city's nonprofits, including colleges and hospitals, to make these PILOT payments.

With the increasing realization that manufacturing will never regain its 20th-century prominence in Philadelphia's economy and that these "eds and meds" are now the biggest drivers of jobs, the issue of nonprofits and their tax-exempt status may become a front-burner topic in the race for a new mayor this year.

Fueling the fire is the fact that Philadelphia - according to the most comprehensive look at the subject, by the Chronicle of Philanthropy in 2006 - had the most property owned by nonprofits and thus off the tax rolls (10.8 percent of all property value) of any of the 24 major U.S. cities examined, and the rate has likely increased since then.

Activists - not just SLAP but its allies in the labor movement and other progressive groups - want the city to negotiate PILOT payments from its larger nonprofits to meet the rising costs of schools and other city services.

PILOT money has ebbed and flowed in municipalities across Pennsylvania in the past two decades, thanks to a flurry of court rulings and legislative action. After a 1985 Pennsylvania Supreme Court decision made it more difficult for nonprofits to claim they were exempt from taxes, the administration of then-Mayor Ed Rendell negotiated PILOT agreements not just with Penn but also with a slew of local nonprofits.

But the amount in these PILOTs was never huge - about $8 million total at the peak, according to experts - and city officials say Philadelphia still gets $5.7 million from various agreements. After lawmakers in Harrisburg approved a law called Act 55 that created a more-favorable playing field for nonprofits seeking tax-exempt status, many of the payments in Philadelphia were allowed to expire. But then a 2012 case in Pike County reversed a part of Act 55, essentially putting that issue back on the table.

With less than a year left in office, it's not clear whether the issue is even on the Nutter administration's radar screen. Nutter press secretary Mark McDonald said in an email: "The City does not discuss its legal strategy in public prior to action on or a decision about any given matter."

The students who protested at Gutmann's holiday party say they don't understand why Penn is so resistant to making the payments. As proof that the cash is there, they cite the Ivy League university's large endowment, Gutmann's salary - $2.47 million in total compensation in 2013 made her the fourth-highest-paid private-university president in the nation - and hiring singer John Legend to celebrate a successful fund drive.

"The amount of money that we're asking for is such a tiny amount," said Devan Spear, a SLAP activist and Penn sophomore from the Orlando, Fla., area studying political science. "Even if Penn decided to push all of the money onto tuition, it would only be a few hundred dollars' increase for each student."

But Penn officials said the tax issue is a lot more complicated. Jeffrey Cooper, vice president for governmental and community relations, pointed to a slew of ways, large and small, that Penn aids the city and school district - most notably its partnership with the Penn Alexander Elementary School in University City, which gets money and other resources from the university.

He cited other projects that get less fanfare, including a grant-funded $2.2 million partnership with the Penn Museum that teaches classical history to seventh-graders.

Noting research into Boston and other cities where PILOTs totaled nearly $25 million in the most recent fiscal year, Cooper argued that converting Penn's relationship with the city to cold, hard cash would harm those beneficial relationships. "I think a PILOT creates a transactional environment where I feel expected to make a payment," he said.

The activists with SLAP remain unswayed. Although they already have experienced some results from last year's actions, including a meeting with Penn's Cooper last week, they plan to step up protests in the new semester. They say student awareness - and anger - over what they perceive as inequality and injustice in America are fueling the resurgence of activism.

Rios said the police killing of unarmed youth Mike Brown and the ensuing protests in Ferguson, Mo., last summer were the tipping point. "Students in general are noticing that things are not OK and that people are tired of it and that there are things we can do," he said. "We can speak out, we can march, we can tell people."