The University will advance about $10 million in taxes to the city of Philadelphia, joining several other institutions in a group effort to help the city weather its cash flow crisis. The $10 million, which will be paid in one lump sum from cash reserves, is the amount of wage taxes that the University would owe to the city through next June. The University is the city's largest private employer. University Treasurer Scott Lederman said that the $10 million will not be taken from another project, and that prepaying the money will not force officials to manipulate the University's budget. He stressed that the prepayment will not affect students' tuition. "We are very careful about those things," Lederman said. "We have a focus from the Trustees on down to keep the rate of tuition very low." Lederman said that the University pays the city $1.25 million in wage taxes in several payments throughout the year. But the University stands to lose several months of interest income that it would have earned on the $10 million. Lederman did not give an exact figure, and said that the University will not seek a tax discount to make up for the lost interest. Philadelphia Electric spokesperson Bill Jones said that the utility agreed to prepay $8 million in wage and property taxes, forgoing about $300,000 in interest. "We feel that it's incumbent upon business to assist the city in any way we can," Jones said. Assistant to the President William Epstein said that it was PE that proposed the idea to President Sheldon Hackney early last week. The move is a "small price to pay" to give city leaders time to find a solution to the city's cash flow problems, Epstein said. He added that it is important that the city's business community make a statement that the Philadelphia economy is basically sound. Treasurer Lederman said that the University wanted to join other institutions in helping the city through its tough financial times. "We don't make decisions like this very lightly, and Philadelphia is obviously very important to the University," Lederman said. Philip Terranova, Drexel's assistant vice president for public relations, said that his school will prepay $650,000 in taxes. "We live in this city and have a stake in it like everyone else," Terranova said. Philadelphia College of Textiles and Science will also contribute. Philadelphia Revenue Commissioner Cheryl Weiss said yesterday that the city has not received money from the prepayments yet, but that her office is working with participating institutions in arranging proper crediting of their accounts. In addition to the large employers, about 100 private citizens have inquired about how to prepay their taxes, Weiss said. She stressed that people should not mail in prepayments without consulting the city's Revenue Department. City Council member George Burrell said that the prepayment demonstrates to potential investors in the city that Philadelphians are willing to work through the crisis. The city failed in an effort to sell $375 million in notes last month. Other institutions prepaying taxes include Children's Hospital of Philadelphia, Conrail, the Meritor Bank, The Resources for Human Development Inc., Rohm and Haas Company and the Tasty Baking Company. Helen Jung and Brent Mitchell contributed to this story.Comments powered by Disqus
Please note All comments are eligible for publication in The Daily Pennsylvanian.