Testimony for Hearing on PILOTS to the Committee on Children & Youth, Philadelphia City Council
Thank you Councilmember Brooks, Gauthier, Gym, Johnson, Bass, Squilla, Green, and Thomas
for introducing and sponsoring this resolution and holding a hearing regarding the relationship between the property tax exempt status of large nonprofit institutions, the state of Philadelphia’s school facilities, and the growing urgency to address the connections between health outcomes and the built environment. My name is Akira Drake Rodriguez and I am here as an Assistant Professor of City & Regional Planning at the University of Pennsylvania, as a researcher who studies the distribution of public goods and services in high-need areas, and as a member of the Penn for PILOTs working group. In this testimony, I would like to briefly outline the goals of Penn for PILOTs based on extensive research by faculty, staff, and students; review some of the critical needs for PILOTs (and other school revenue streams) based on my own research with residents and educators around district policies, and finally tie these issues to the broader needs around school district facilities, re-openings, and public health.
Penn for PILOTs began out of a student movement that built on a decade of student-community-staff organizing. More than a thousand Penn faculty and staff have signed our petition for the University of Pennsylvania to commit to making payments in lieu of taxes to help ensure adequate funding for the Philadelphia public schools. Penn is the largest property owner in the city of Philadelphia, but as a non-profit institution, it pays no property taxes on its non-commercial properties. In other words, it contributes nothing to the tax base that funds Philadelphia’s public school system—this in a city whose schools are underfunded and facing deep budget cuts amid the COVID-19 pandemic.
Penn did pay PILOTs in the mid-1990s when then-Mayor Ed Rendell issued an executive order that suggested the city would review the non-profit tax-exempt status of its largest institutions. To assist the city in its near-bankruptcy budget crisis, Penn and other large tax exempt institutions began paying PILOTs through the end of the decade. Today, with Penn having become the seventh richest university in the country, the conditions in public schools in Philadelphia–the largest poorest city in the country-- require that we make that commitment again.
Together with Jobs for Justice and other community groups, Penn for PILOTs is asking that Penn (and other similar large non-profit institutions) pay 40% of what its property taxes would be if it were not a tax exempt institution to support the city’s schools. Based on Penn’s 2016-2017 annual budget, we estimate that Penn’s PILOT payment today would be roughly $40 million. To put that figure in perspective, $40 million is just over one-third of one percent (0.35%) of Penn’s unrestricted annual revenues for fiscal year 2020. It is just over a quarter of one percent (0.26%) of the value of Penn’s endowment. Penn and the city’s other wealthy nonprofits can definitely afford to meet the basic responsibility –met by all the city’s homeowners and businesses-- of contributing to our children’s education.
Based on my own research, I also want to stress, however, that while the city’s wealthy non-profits paying PILOTs would be an important step towards addressing the inequalities that plague the school district and the broader city of Philadelphia and its surrounding region, it would only be one step towards addressing the needs of the school district. Many of us are now focusing on the conditions of the school district’s facilities, but we also need to pay close attention to staffing, supplies, and overall operations. Philadelphia’s schools have suffered from a disinvestment in school counselors, nurses, paraprofessionals, educators, therapists, librarians, art and recreation teachers for decades. There are issues around governance, procurement, and safety that will make it difficult to re-open schools safely, even if the school district could immediately replace every HVAC system, water fountain and sink faucet, and remediate all the asbestos.
Strikingly, the greatest issue I find in my research is that the trust that is needed to cooperatively make decisions that address the multiple needs and interests of children, caregivers, and school staff has been severely eroded in the last decade. Although the school district’s governing body, the Board, has reverted to local control in the last 5 years, public comments have increasingly raised issues around transparency and accountability in recent months. The August 2020 Inspector General report on the remediation of the Benjamin Franklin/SLA asbestos project was a damning account of the multiple failures of the school district to address the safety of the building occupants (including workers, students, and caregivers), the communication skills of a public entity, and the accountability of public servants. In this year of COVID 19 and increasing attention to issues of racial and economic injustice throughout our city, it is clear that all our major public and private institutions have been failing the children of Philadelphia.
At this time of reckoning, I would, therefore, like to end on the note of linking health, building conditions, and public trust and accountability. I want to urge City Council to work with the Mayor, the School District, and the city’s caregivers, educators, staff, and students not only to press for a critically needed source of funding from the city’s major tax exempt institutions, but also to address the decades of mistrust, inequity, and underperformance in our public schools. We need a democratically elected board to allocate and spend new sources of revenue on school facilities and resources. We need greater citizen and community engagement to determine how the school budgets are spent in the district. A plan to engage all the city’s major non-profits in paying PILOTs, as well as Penn’s current major gift to the school district, provides an opportunity to do so.
Thank you.