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Some Penn community members believe the University should still make Payment in Lieu of Taxes. Credit: Gary Lin

Following years of backlash for its refusal to make Payment in Lieu of Taxes, Penn has decided to contribute $100 million to the School District of Philadelphia. Yet, students and professors say the contribution is not a PILOT, criticizing its short-term commitment as well as Penn's framing of it as a gift rather than a debt owed to the city.

Penn announced on Tuesday that it will contribute $10 million annually to Philadelphia schools over the course of 10 years to address environmental hazards such as asbestos, which has led to the closure of 11 schools since October 2019. Students and professors are backing Penn for PILOTs' demands that the University pay 40% of what it would owe in property taxes, which is almost four times the amount Penn has pledged to give annually, and continue contributing to the city well beyond the 10-year period.

Penn for PILOTs is a group of over 1,000 Penn faculty and staff that has collaborated with community members and organizations such as Philadelphia Jobs with Justice, a coalition of labor unions and community groups who fight for the fair treatment of working people. Based on Penn's 2016-2017 annual budget, Penn would have owed $91 million in real estate tax to the city of Philadelphia, 40% of which is $36.4 million that should be paid in PILOTs annually, according to the group.

Jolyon Thomas, Religious Studies professor and Penn for PILOTs member, said the contribution is not a PILOT because the University framed it as a gift rather than a debt that is owed to the city of Philadelphia. Thomas said that upon reading the announcement, he immediately noticed that the University depicted its gift as a charity donation, and that the word “PILOT” was not included in the email.

“A PILOT is different, because a PILOT is recognizing that the University benefits from the social services the city provides and recognizes that it has an obligation, even though it’s a tax-exempt institution, to pay something that would be the equivalent to the amount of money that is roughly equal to the things Penn takes from the city,” Thomas said.

As a nonprofit institution, Penn is exempt from paying property taxes to the city, but peer universities such as Harvard University, Yale University, and Princeton University still choose to pay PILOTs to their surrounding communities. Harvard and Yale paid the cities of Boston and New Haven $10 million and $8.1 million, respectively, in 2012, according to the Lincoln Institute of Land Policy.

Credit: Ava Cruz

Thomas added that the money for the gift comes from a discretionary fund earmarked for the use of the University president. The continuation of the contribution is therefore dependent on when the president wishes to make the payments. In order for a payment to qualify as a PILOT, Thomas said it would have to be stable and predictable, rather than the 10-year limit attached to the University’s gift.

“Penn has put forward a lot of money,” Thomas said. “But it’s only a down payment on what [Penn for PILOTs members] think is a much longer project.”

Amy Offner, associate professor of History and Penn for PILOTs member, said that the University’s decision to contribute to the city of Philadelphia is a testament to the hard work of public school teachers and students, as well as members of the Penn community, who have advocated for Penn to pay PILOTs. She added, however, that Penn must pledge to make permanent contributions of a larger scale to the public school system. 

“The Philadelphia public schools have been chronically underfunded for many years, and the University of Pennsylvania is the largest private property owner in Philadelphia,” Offner said. “As long as public schools are funded by property taxes, Penn has an obligation to pay its fair share as a matter of economic and racial justice.”

College senior Amanpreet Singh, former Daily Pennsylvanian and 34th Street staffer, is a member of the Student Labor Action Project, a student-worker collective that has advocated for Penn to pay PILOTs. Like Thomas, Singh does not consider Penn’s gift to be a PILOT, because it does not come close to the $36.4 million that Penn for PILOTs has called on the University to pay.

Singh added that the University's contribution seems to be a result of the mounting pressure from the Penn community to pay PILOTs.

“I personally think they’re a little afraid, because the momentum is building,” Singh said. "I also think they like to get out ahead and look like the good guy while actually doing nothing. Ten million dollars a year is nothing for Penn.”

Like Penn for PILOTs, Philadelphia Jobs with Justice will continue to advocate for Philadelphia public schools until a city-wide program is implemented in which nonprofits pay 40% of their property taxes, said 2017 College graduate and Philadelphia Jobs with Justice Executive Director Devan Spear.

Spear added, however, that the $100 million contribution will certainly benefit Philadelphia schools' fight against the asbestos crisis, which has posed a serious threat to the health of both students and teachers for years. 

“I was really glad to see that the contributions will be going to remediate lead and asbestos, which is truly an acute, terribly severe problem,” she said. “I do think that there will be a real, immediate material impact on [Philadelphia] public school children, and I am very excited to see that happen.”

After College first-year Anita Chacko witnessed the closure of a school in her home district in New Jersey due to similar environmental hazards plaguing Philadelphia schools, she believes it is crucial that Penn pay PILOTs to help fund facility renovations that could mitigate students' exposure to asbestos and lead.

“It’s terrifying knowing that there are kids in my community who were exposed to carcinogens every day, and I don’t want that to happen to the Philadelphia community,” Chacko said.