"Just tax the University of Scranton"

A familiar comment you hear relative to Scranton's never-ending march towards municipal bankruptcy was noted recently on a Facebook thread:

"I know I might get slapped down for this comment...but we need the University to start paying taxes.  Look at the amount of properties they have amassed over the years..."

Now the issue about the University of Scranton having to pay property tax is complex, to say the least. As I understand it, the exemption technically resides at a state level, and is based on a 1985 court ruling (Hospital Utilization Project v. Commonwealth Pennsylvania), whereby there is a 5 point test to determine if an organization should be exempt from property tax.  That test defines a public charity as an organization that:

• Advances a charitable purpose;
• Donates or renders gratuitously a substantial portion of its services;
• Benefits a substantial and indefinite class of persons who are legitimate objects of charity;
• Relieves the government of some of its burden; and
• Operates entirely free from private profit motive.

You could argue that the University of Scranton both does and doesn't meet the above test, but that's not my point.  Rather, my point is this:  To say that the law should be changed to allow for taxation of an organization like the University of Scranton creates more questions than it problems it solves (in my opinion).  For example, if the University of Scranton has to pay taxes, what about Scranton Prep? What about the Hebrew Day School and every other private religious school? What about churches? An Atheist could easily argue that many churches in fact do far less for the community than the University of Scranton does. Do we want to just exempt small property owners, so that large property owners like the University are taxed? If so, how would the Diocese of Scranton, as a whole, be treated?

At the end of the day, I'm not arguing for or against taxing the University of Scranton, but rather what I'm saying is that a government simply can't single out one charitable organization for taxation without creating a whole host of other questions that need to be answered.

I will say the following though:  The refrain of "Just tax the University of Scranton" is just another way to avoid dealing with what REALLY is the central issue facing the City of Scranton, namely incompetent leadership, a budgetary expense structure that has not changed along with the city's population, unrealistic (including pension promises made to employees that are simply impossible for the city to keep) compensation/benefits for city employees and a punitive tax structure.

When all is said and done, complex problems seldom are solved with sound-byte answers.

Road Apples, #122

Mittens vs Santorum...apparently both are neck-n-neck for the GOP nomination in Pennsylvania.  Rather astounding actually.  As of about 9am this morning, I think that Rick Santorum has offended everyone other than white males between the ages of 42-60 who are devoted and practicing Catholics.  Maybe.

Steve Ballmer...Is it just me or does Microsoft CEO Steve Ballmer look like Gru from Despicable Me?  Judge for yourself:

Still not the best celebrity look-alike I've seen lately; that would go to the Guy Smiley/Mittens comparison.

Scranton City Councilman Jack Loscombe...A story in today's paper (I'd link to it, but the Scranton Times has this pay-per-view deal that I don't care to support) documented the lawsuit by Scranton City Council member Jack Loscombe.  In his suit, Mr Loscombe seeks to have his pension reinstated while serving as a member of council.  By way of background, there is a law in Scranton, dating back to the 60's, that states if a retired firefighter serves on city council his pension is suspended for the term of his service.  The argument by Mr Loscombe is that he has a "right" to the pension.  The argument by the city is that, well, there is a law against "double dipping".  As for me, I think there are two central issues:

• Mr Loscombe's claim that his pension is some kind of sacred "right" is silly at best, as there is no "right" to a municipal pension.  Mr Loscombe's pension is a benefit of having served the city, but the "right" is far from absolute, as there are numerous instances where a pension can either be attached (by the IRS or a court) or cancelled all together (in the case of a felony conviction).  
• The city's law against double-dipping seems like a solution in search of a problem.  What's the harm if Mr Loscombe receives his council pay and his firefighter pension?  The pay comes from a different pot of money than the pension payment.

The bigger issue I have with Mr Loscombe is that I view him as having an automatic conflict of interest when dealing with firefighter contract negotiations.  In those situations, who does Mr Loscombe serve?  The taxpayers or the members of the firefighter union?  Typical Scranton.

Supreme Count & "Obamacare"...Just for giggles, you may be interested to know that the very concept of the healthcare mandate came from the Heritage Foundation.  Interesting citation...

"The concept of the individual health insurance mandate is considered to have originated in 1989 at the conservative Heritage Foundation. In 1993, Republicans twice introduced health care bills that contained an individual health insurance mandate. Advocates for those bills included prominent Republicans who today oppose the mandate including Orrin Hatch (R-UT), Charles Grassley (R-IA), Robert Bennett (R-UT), and Christopher Bond (R-MO). In 2007, Democrats and Republicans introduced a bi-partisan bill containing the mandate."

Citation here.  If the Supreme Court strikes down "Obamacare" then so be it...but scoring political points on the part of the GOP will not solve the very real problem with endless double-digit healthcare cost increases in  this country.  Oh, and let's shoot down the talking point of "harnessing the power of the free market to solve the nation's healthcare problems"; such a notion is a ridiculous joke...at best.  When was the last time you heard of someone suffering from a heart attack "shopping" for the best price for medical care?  You can't buy a pacemaker on eBay either.  The free market simply doesn't function well when the profit motive conflicts with larger societal needs, which also explains why we don't have a for-profit military, police corporations protecting the population and Haliburton running your local fire department.

Yes, I'm very much open to other solutions to the nation's very real healthcare problems, but those solutions need to be more than just political soundbytes.

Recommended Reading...Scranton Times

The Scranton Times article today (the second in a series) about non-profits & taxation was excellent. You can find it HERE.

I detest politicians who take complex issues and "sound byte" them. That's what the whole non-profit debate in Scranton may be degrading into; rest assured that while the non-profits should be doing more, this isn't a simple issue of they need to pay up or else.

A letter to the editor in a recent edition of the Time caught my eye as well as it relates to this issue. Specifically, the writer commented on the fact that at least some of the properties taken over by the University of Scranton were probably not current on their taxes. That may or may not be true, but it again points to the fact that the issue of taxation isn't as simple as it may appear.

Speaking of simple, I've been reading a certain local message board and the posters...99% anonymous...are regularly bashing the Mayor Chris Doherty and the University of Scranton over this issue while lauding Council President Janet Evans as being some kind of hero. Do these folks realize that it's the Internal Revenue Code...not Chris Doherty...that set forth the rules that regulate the taxation of not-for-profit entities? There is nothing...zero...zip...nada...that can compel an organization designated as a 501(c)(3) to pay taxes on the property that is central to their mission. Not even Council President Evans, with her mighty powers (and ability to type thousand word letters in ALL CAPS) has that ability.

The solution here is actually pretty simple: sit down with these entities and have rational, fact-based discussions that don't involve posturing for "followers". Speaking of rational (or lack thereof), I'll continue to call Council President Evans out on her absurdly surreal behavior on this issue, but I'd be remiss if I didn't point out that the Mayor has had several years to work on this but really hasn't done squat. Time to get off your butt Mayor Doherty and make a sincere effort. This issue needs to rise above the politics of "gotcha" that you play with Mrs Evans.

The Priest vs the Politican, Part Deux

Forget all the analysis, multi-paragraphed letters to the editor, lawyer talk and the like; this comes down to a simple question:

Do you believe the Priest

or

Do you believe the Politician?

Janet Evans Declaration, 07.21 Edition of the Scranton Times

Now I know that the priestly profession has taken a beating of lately, but I'll note for the record that I've never really had a bad experience with a priest. In fact, some of the most insightful, compassionate, honest and kind people I've ever met have been/are priests. I can't say the same about the vast majority of politicians I've met though.

Oh, and Janet Evans is a consummate politician.

Mrs Evans vs. Fr. Pilarz

There has been much discussed over who initiated the quip pro quo linking the University of Scranton's building plans to a contribution in lieu of taxes. NEPArtisan, for example, has been following it quite a bit. Yes, I agree with Tom Borthwick that this is degrading into a "he said, she said" fiasco, but let's look at the players:

Fr. Scott Pilarz
In one corner you have a Priest, Father Scott Pilarz, who is the President of the University of Scranton. You can read his biography HERE. While I personally agree that the University could do much more to help the city financially and in other ways, the basic fact is this: the University is a wildly successful institution (as evidenced by all the property they buy & take off the tax rolls) that appears to be well run.

Council President Janet Evans
In the other corner you have a politician, Mrs Janet Evans, who is the President of Scranton City Council and who is also a teacher currently on disability. I'd link you to a biography of Mrs Evans, but I can't find one on-line. In terms of accomplishments, Mrs Evans has been in city government for a number of years but yet outside of being re-elected, I'm not quite sure what she has accomplished. Yes, it's tough to accomplish anything when you consider yourself to be the political opposition, but that's a dim excuse at best. For example, I could rattle off countless accomplishments by the current opposition party in Congress right now, including several changes to the financial services regulation bill that will soon be voted on by the U.S. Senate.

Given the choice between the priest or the politician, I'm believing the priest.

PILOT Targets

Since Scranton City Council President Janet Evans has been unsuccessful in extorting...I mean garnering...additional payments in lieu of taxes from the University of Scranton, I'm wondering if she is going to continue the crusade with other institutions.

Now before I go any further, I'll again state for the record that the University should be paying more to the City of Scranton to compensate it for lost tax revenue and for the direct services that the city provides to the University community. Legally...I know, people don't want to hear this...but legally the University, being an IRC 501(c)(3) organization, doesn't have to pay anything to Scranton. Not one thin dime. Similar institutions that are involved in religious, charitable, cultural or educational endeavors don't have to contribute that thin dime either. However what is legal and what is right aren't always the same thing, a point that the exceptionally well educated Jesuits that run the University know full well.

Back to the post.

I think Mrs Evans has been aiming at the wrong target. Instead of simply tackling the University of Scranton as a individual institution, I'm wondering if she will next go after the largest non-profit in Scranton, namely the Roman Catholic Church. Think about it: in theory the Church de facto owns the University of Scranton via the Society of Jesus. Why deal with the subsidiary when you can, in fact, deal with the parent company instead? What's more, there is plenty of other Church owned or Church-related property and endeavors that happen within the confines of Scranton's 25 square miles, so why not look into it. For example, there is a Novena to St Ann coming up shortly (details HERE if you are interested in attending) that will bring thousands of people into the city. It will also require extra police coverage. Sounds like it will cost the city some money. Maybe the Church should be making a PILOT contribution to compensate the City for its expenses related to the Novena.

The above was written somewhat tongue-in-cheek, but it makes a point: Mrs Evans is once again engaging in a crusade that has more to do with demonizing an enemy (substitute "Doherty" for "U of S") in order to score points with a personal constituency (substitute "Municipal Unions" with "U of S haters") than it does in actually achieving results. If she were truly interested in working with the University come up with PILOT contributions, then maybe, just maybe, the negotiations wouldn't be happening on the grandstand that is Scranton City Council Chambers. These negotiations probably wouldn't take the form of "in order to get your building variance you have to give us money" talk either.

By the way, we've seen this before. Yes, we've already had Mrs Evans demanding that council could open up a budget (it can't) and that it could seat its own appointees (it can't). This is like a bizarre version of the television show Home Improvement...same plot repeated over and over again.

In the final analysis, I realize that it's hard to gain cheap political points when you are working behind the scenes, but maybe Mrs Evans needs to put her ego aside, stop pandering to her narrow constituency, and start actually working with people to solve problems. I know, this means giving up some perceived authority, but governing a city is a hell of a lot different than governing a high school English class. Maybe, just maybe, Mrs Evans needs to change her approach if she is actually interested in achieving some results. Command and control works well in the Marine Corps and when your audience is a class of 16 year old young adults, but it falls flat when those who you want to control don't actually have to listen to you.

Extortion?

Interesting article in today's Scranton Times (link HERE).

For the record, I absolutely do believe that the University of Scranton does need to provide more direct compensation to the City of Scranton for the services that it consumes and to provide for some kind of in-lieu of property tax payment. However, connecting that compensation to the approval of a building permit seems shady at best, down-right sleazy at worst. "Quid pro quo" is being kind, as this looks more like extortion to me. To the University's credit, they apparently have decided not to "play" and are scaling back their plans.

Supporters of Mrs Evans will claim that this is more "Pro-Doherty" bashing, and that's to be expected. However this is a self-inflicted wound on Mrs Evans part. You simply can't link to completely different issues together to come with "if then" statements, especially when large sums of money are involved. It's simply wrong. It's also simply the kind of thing she is famous for accusing Mayor Doherty of doing.

What's next, will Mrs Evans send "Johnny Two Fingers" and "Guido the Sausage Maker" over to Father Pilarz to make him an offer he can't refuse?

Anyway, here is a common sense alternative: The City and the University administration should both determine a dollar value for the direct services (police, fire, etc.) provided and a figure in lieu of property taxes. Both sides should then sit down and negotiate a fair payment based on their interpretation of the facts. No more sleazy extortion, no more blustering in the paper, no more stalling on the part of the University.