The city of Meadville is facing a budget deficit of $656,000. One way to help fix this deficit is to have our local nonprofits pay their fair share of city services through the PILOT (payment in lieu of taxes) program.
The bulk of city services are paid for by property taxes, but 45 percent of property in Meadville is tax exempt, which means 55 percent of the population carries the burden of paying for 100 percent of services.
Many tax-exempt organizations provide valuable community benefits, but these benefits do not compensate for the lost property tax revenue.
Right now, the total value of all tax-exempt properties in Meadville is $123 million. At the current 21.92 millage rate, this amounts to $2.7 million in lost property tax revenue each year.
Just like homeowners and businesses, tax-exempt entities rely on city services, but their PILOT payments (if they pay anything at all) fall below what they would pay in property tax.
For example, Allegheny College owns $34.9 million in tax-exempt property, which would be a $765,000 property tax bill. Instead the college pays $75,000 to the PILOT, which is less than 10 percent of what it would pay in property tax.
The Meadville Medical Center owns $12.2 million in tax-exempt property, which would be a $267,000 property tax bill. Like the college, it pays $75,000 to the PILOT, which is 28 percent of its full property tax bill.
Wesbury owns $8.3 million in tax-exempt property, which would be a $183,211 property tax bill. Wesbury contributes nothing to the PILOT program.
If these three entities alone contributed 30 percent of their property value to the PILOT, it would generate $364,731 for the city.
At a time when the city faces a severe budget shortfall, we need our nonprofits to pay their fair share.