A (not so) taxing relationship part II: Commitment U. owes to city remains vague

Just after World War II, University officials explored the possibility of moving to a tract of land which had been given to them near Valley Forge. The move would have given the University space which was not available in increasingly-developed West Philadelphia, and would have put the University in a far different environment than that which surrounds it today. But Philadelphia asked what is today its largest private employer to stay in the city and continue to contribute to its well-being. The city's acknowledgement long ago of the University's value could be an argument which the University could appropriate in the ensuing debate over property taxes and tax-exempt institutions in Philadelphia. As the city seeks to tap new revenues in a time of financial crisis, city leaders are reexamining University-city relations and considering charging the University and similar non-profit institutions payments in lieu of property taxes from which they are exempt. Key to the debate is exactly how much the University and city contribute to each other. City officials say that universities deserve a discount for city services. University affiliates agree on the importance of contributing to the community. But it is not clear if the two will amicably agree on exactly what the University's contributions should be. · Currently, the city provides the University with fire and police service as well as giving a 25 percent discount on water for non-profit buildings and allowing the University to dump trash free of charge at city facilities. The University is also exempt from paying real estate taxes on property which is determined to be part of its "educational mission." But mayoral candidates and City Council members have recently questioned whether the city should continue all of the University's benefits. Many of these exemptions, however, are required by city and state laws, placing limits on which benefits can be open for debate. While several city officials said recently they are in favor of cutting some exemptions for charitable and educational institutions, there is a contingent that believes that considering new fees for non-profit organizations is unfair, saying that the University already provides prestige and monetary benefits to the city. For example, James Pallodino, a utility rate analyst for the Water Revenue Department, said the water department considers the 25 percent discount it currently provides to be fair. But he said in the 1970s, the rates of some charitable and educational institutions were frozen while the rates for fully-charged institutions continued to rise -- creating an unfair bonus for the non-profits. Now the rates all increase at the same rate even though some are set lower than others. "[Non-profit institutions] are deserving of some level of subsidy," Pallodino said this week. Other politicians, including those who drafted a City Council resolution on the issue of tax-exempt institutions, also indicate that because of the benefits universities provide to the city, they should continue to receive various services at low or no cost. But the resolution also asks for a task force to examine how universities can give back to the city in various non-monetary ways. Resolution 402, which was passed last spring, called for a taskforce to explore "improving the nature and quantity of in-kind services that can be performed by certain tax-exempt entities, such as hospitals and institutions of learning." But there are differing views among University affiliates as to what constitutes "in-kind services," as well as what the University's responsibility to the community should be. Professor Ira Harkavy, who is director of the Penn Program for Public Service, said this week that universities and communities should work cooperatively for the improvement of both. Harkavy said if the University did what he believes they should, members of the University would learn not through experimenting on community citizens, but by working with them. "West Philadelphia would function as a natural social and cultural laboratory that would involve the University in extensive community participation projects," Harkavy said. But President Sheldon Hackney said yesterday that while direct contributions to the community is very important, the University's primary purpose is "to educate students and produce new knowledge." "Direct benefit programs are wonderful, but they ought to be put in the perspective of our major purpose, which is the production of tomorrow's leaders," Hackney said. He did say, however, that "the University has some heightened moral obligation to share our talent." (CUT LINE) Please see COMMITMENT, page 11 COMMITMENT, from page 1

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