Critics say Pa. Senate proposal could hurt Philly's ability to cash in
March 22, 2013By Holly Otterbein, @hollyotterbein
Some Philadelphia legislators are worried that a recent proposal to amend Pennsylvania's constitution would upend their plans to tap nonprofits for money for city services.
The amendment would clarify that state lawmakers have the power to decide what nonprofits are exempt from local taxes.
State Sen. Mike Brubaker wrote the resolution, which the Senate passed this week, after a court ruling made it easier for cities to challenge nonprofits' tax exemptions. He said the YMCA and Habitat for Humanity have since wrongly lost their tax-exempt status in Warren County.
Brubaker pointed out that voters would ultimately have to approve the amendment.
"I can't comprehend at all any member of the General Assembly that wants to block a people's decision," he said. "Let the people decide if they want the court system in the future to make these decisions or the General Assembly of Pennsylvania."
Philadelphia City Councilman Bill Green introduced a bill last month that would force every tax-exempt nonprofit to certify annually its eligibility for the break. He thinks it could help the city to persuade some nonprofits to contribute voluntary "payments in lieu of taxes," or PILOTs.
But he said the state amendment would hurt the city's chances at that.
"What you'd see is all the big charities, whether they be educational institutions or hospital centers or other things like that, will be spending lobbying dollars and campaign contributions [in Harrisburg] to make sure that they get specifically named as exempt," he said. "I think it's a disgraceful way to approach this."
State Sen. Larry Farnese, D-Philadelphia, also said he was concerned that the amendment would limit Philadelphia's leverage to convince nonprofits to sign up for PILOTs.
Conversely, Brubaker, R-Chester, said his proposal is "silent on the issue of PILOTs." He said cities still would be able to encourage tax-exempt nonprofits to pay up.
If Brubaker is successful, it would take years to change the state constitution.