Tax-exempt colleges contribute in other ways, report says

The Bell Tower marks the center of Temple's Broad Street campus. Colleges are pushing back against calls for more money.
The Bell Tower marks the center of Temple's Broad Street campus. Colleges are pushing back against calls for more money. (CLEM MURRAY / Staff Photographer)
Posted: October 18, 2013

Philadelphia's universities, which are largely exempt from paying property taxes, are fighting back against the idea that they should make payments to the city to help with its school funding crisis and other needs.

A universities-commissioned report to be released Thursday says 12 of the city's universities collectively produce an economic impact of $10.9 billion. That includes employing 84,000 people and generating $211 million in city tax revenues, according to the report by Econsult Solutions, a Philadelphia-based economic consulting firm.

The calculations take into account university operations, construction projects, and student and visitor spending, including millions in tuition dollars.

The universities also kick in $641 million in scholarships, community services, public safety operations, and other in-kind contributions, the report said. The contributions span "every neighborhood and every conceivable type of resource and program," it said.

The report was commissioned several months ago by the University of Pennsylvania, Community College of Philadelphia, Moore College of Art and Design, University of the Arts, Peirce College, University of the Sciences, and Drexel, Temple, St. Joseph's, La Salle, Holy Family, and Thomas Jefferson Universities. .

It comes as some local and national officials, including former Gov. Ed Rendell and American Federation of Teachers president Randi Weingarten, have begun calling on the city to resume collection of Payments in Lieu of Taxes, or PILOTs, from universities as a way to help ease the School District's budget crunch.

In the 1990s, when Rendell was mayor and the city was in dire financial straits, his administration set up a PILOT program that collected about $9 million annually from about 50 entities, including nearly $2 million from Penn. The program was begun after a state Supreme Court ruling put pressure on nonprofits to prove their tax-exempt status.

But a 1997 state law made it easier for nonprofits to qualify for exemptions, and the city's PILOT program has all but expired. Few institutions still make payments, bringing in about $400,000 a year.

"The universities came together and said there's a lot of half-truths and misunderstandings, and we want to tell our side of the story," said Lee Huang, senior vice president of Econsult. "They brought us in to help tell that."

The report includes an appendix with 87 examples of university partnerships and programs.

The universities grant scholarships totaling $119 million to city residents each year, the report said.

They also lend personnel and expertise to city schools. Penn, an Ivy League institution with a $6 billion-plus budget and a $7.7 billion endowment, gives up to $750,000 a year to Penn Alexander, a district elementary school in its West Philadelphia neighborhood that opened in partnership with Penn in 2001. It assists other neighborhood schools as well.

St. Joseph's funded and built a playground for Gompers Elementary, the report noted. Student athletes at La Salle mentored and coached students at Logan Elementary in 2012-13 and helped clean up the building, providing more than 2,500 hours of service. Jefferson is training high school students in science, technology, engineering and math.

The universities, the report said, also create jobs through construction projects and host health-care programs.

Moore offers art courses to more than 1,000 children each year. Several universities, including Drexel, Penn, and Temple, employ their own police departments.

The report also cited Penn's recently completed $4.3 billion capital campaign as a benefit to the city. Most of the money came from people outside the city, it noted.

"The vast majority of those funds will be spent in Philadelphia to construct buildings, provide scholarships, and serve the university's mission - all while also creating jobs and generating tax revenues for the city," the report said.

Jeffrey Cooper, Penn's vice president for government and community affairs, said the report shows that the city's universities have aligned "their respective missions of education, service, and research with the needs of Philadelphia's citizens."

Lynette Brown-Sow, vice president of marketing and government relations at Community College of Philadelphia, said the model works: "We serve the city in many ways, providing thousands of dollars, hours, and services."


BY THE NUMBERS

$10.9B

Annual economic impact of

12 universities in the city, according to an Econsult Solutions report commissioned by the colleges.

84,000

Number of people employed

by the 12 colleges.

$211M

Annual amount generated

in city tax revenues.

$641M

Annual amount in scholarships, community services, public safety, and other in-kind contributions.


ssnyder@phillynews.com

215-854-4693

@ssnyderinq

www.inquirer.com/campusinq

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