Charges on nonprofits proposed as alternative to drink tax

State Sen. Wayne Fontana on Friday proposed legislation that would allow governments to charge fees to nonprofits. Hours later, County Council members met Downtown with state lawmakers to discuss using the measure as a possible alternative to the drink tax.

Fontana's legislation, which he hopes to introduce next week after gathering co-sponsors, would allow municipalities to charge some tax-exempt building owners an essential-services fee.

The fee could reach up to $100 per 1,000 square feet of building space, after the first 5,000 square feet. For new properties, municipalities could impose a limited property tax of 10 percent of a property's assessed value per year, for five years.

"The attempt is for it to start the discussion," said Fontana, a Democrat and former County Council member, who touted bipartisanship before yesterday's meeting.

"It's not going anywhere unless (Councilman Chuck) McCullough's delegation also supports it," he said, referring to the Upper St. Clair Republican who is pushing a similar measure at the county level. "There's an alternative. There's an option. (It's time) to step up and find a solution."

The sentiment was echoed at a public meeting in the Allegheny County Courthouse, where several lawmakers and their aides peppered about half of the council with questions about the proposed charges to nonprofits.

Council members said the move, jump-started by Councilman John DeFazio during a November meeting, would make some nonprofits pay a fair share for services ranging from county police and the health department to public works improvements, transit and the court system.

"All we're looking for here ... is a little fairness," said Councilman Mike Finnerty, D-Scott. "I think we have to evaluate the situation. ... I think it's an important thing for the state of Pennsylvania."

Rep. David K. Levdansky said the potential alternative to the drink tax raises other issues -- specifically, how the county has frozen property tax assessments at the 2002 level under its base-year assessment system.

"You are still in a long-term fiscal dilemma (because) you have chosen to freeze your property taxes," said Levdansky, D-Forward. "And you're looking for an easy out."

"We're not taking an easy route," retorted Council Vice President Charles Martoni, D-Swissvale. "We had some very hard choices we had to make."

More than 4,900 parcels of land -- about 20 percent of the county's 26,059 tax-exempt parcels -- would be charged a fee under county legislation introduced by McCullough. Churches, schools and charities would be exempt from his ordinance, which appears to target nonprofits such as universities and the University of Pittsburgh Medical Center.

Nonprofits, even those not affected by the proposed fees, have condemned McCullough's bill, which could generate more than $13 million a year.

Drink-tax opponents tout it as a strong and reliable alternative to the unpopular levy on poured alcoholic beverages and $2-a-day rental car tax, which took effect Jan. 1. Those taxes are supposed to raise more than $30 million this year to help pay for public transit.

"There appears to be broad-based awareness that contributions (from nonprofits) must be arranged," said Cris Hoel, a lawyer for the hospitality industry, which fought the drink tax.

"The hospitality industry (feels) that (yesterday's) meeting, by bringing together state and local officials, Republicans and Democrats, urban and suburban representatives ... will be able to overcome some of the disconnects that have become obstacles," Hoel said.

Gov. Ed Rendell said opponents should look to a similar tax's successes in Philadelphia.

"That's what the restaurant owners said in New York about 'no smoking," he said. "They're doing better than ever. That's what they said in Philadelphia before the drink tax. They're doing better than ever. So everybody should take a deep breath."

• Most Read
• Most E-mailed
• Latest News