City, U. still discussing tax payment

Philadelphia Police protect students off-campus, the Streets Department cleans the streets and, if there's a fire, the Fire Department responds. And now the city of Philadelphia and Mayor Ed Rendell want the University to pay for it. Traditionally, non-profit institutions located in the city have not paid taxes, even though they use city services. And although it has been just under a year since the city asked the University to pay about one-third the property tax it would owe if it did not enjoy tax-exempt status, the two organizations have not yet come to an agreement. The controversy started last year when the mayor devised the Payment in Lieu of Taxes/Services in Lieu of Taxes program to make non-profit entities like the University pay some of the tax burden in the form of some tax or payments or services. The goal of the program is to raise an additional $33 million a year in revenue and free services from normally tax-exempt agencies which are not "purely for charitable use." This includes about $8.5 million from area colleges. The University would also be able to deduct services that benefit the community, such as University Police, from their assessed tax burden. The money and services will then be used in the city's school districts. But if the University refuses to make such an agreement, the city could take action in court -- possibly causing the University to pay 100 percent of its would-be taxes, eliminating in all but name the University's tax-exempt status. Paul Cribbins, the University's director for city and commonwealth relations, said the city and University are currently deliberating over the PILOT/SILOT program. But even though the city has been slow to take action against non-profit organizations, it is clear that the mayor considers the program important, and plans to follow through with its implementation. Just last week, Rendell mentioned PILOT/SILOT during his re-election announcement. The mayor singled out and honored Fred Dibona Jr., an official of Independence Blue Cross/Blue Shield, for being the first non-profit company to pay its share through the PILOT/SILOT program. He added that Dibona stands as an example of big business reaching out to help the city. "That is an extraordinary step for a corporation to come up and say that they're willing to pay an addition tax load," Rendell said. "But they did it for the city."