1

PSCI 335: Healthy Schools EXAMINING THE UNIVERSITY OF PENNSYLVANIA’S ARGUMENTS AGAINST PILOTS An Analysis of the University of Pennsylvania’s Claims Against Payments in Lieu of Taxes

Nopakit Lerthirunvibul, Jocelyn Pickens, Ashley Van, Ling Zhou with Devan Spear and Mary Summers

2

Table of Contents INTRODUCTION………………………………………………………………………………...3 CLAIM 1: WAGE TAX…………………………………………………………………………...6 CLAIM 2: PENN ALEXANDER……………………………………………………………….11 CLAIM 3: NETTER CENTER…………………………………………………………………16 CLAIM 4: TRANSACTIONAL RELATIONSHIP………………………….………………….26 CONCLUSION……………………………………………………………………………….…36 BIBLIOGRAPHY……………………………………………………………………………….39

3

Introduction: Philadelphia’s public schools are in crisis. A report released in January of 2015 by Pew

Charitable Trusts found that Philadelphia spends less per pupil than almost any other education system in the country, including the cash-strapped city of Detroit.1 The history of this funding crisis has its roots in the decades-long struggle between the school district and those responsible for its funding. In 2001, Philadelphia’s history of chronic budget difficulties led to a state takeover of the schools and the establishment of the School Reform Commission (SRC). More recently, former governor Corbett reversed former Gov. Ed Rendell’s funding formula, which would have put Philadelphia’s funding on an equal footing with the rest of the state.2 As a result of these budget cuts, the School District of Philadelphia (SDP) eliminated 5,000 staff positions and 31 schools in the past two years, 24 of which were shut down just last year.3 This past fall,

Governor Tom Corbett had to advance the city $265 million so that schools could open on time.4

This paper explores the role played by the University of Pennsylvania, an elite, highly endowed Ivy League institution, in relation to the Philadelphia school district. Because of its nonprofit status, Penn does not pay any property taxes. It also chooses not to take the option elected by most other Ivy League institutions: to make “payments in lieu of taxes” (PILOTS) to support the city’s schools and other public institutions. We look at the university’s arguments against paying PILOTS and argue that regardless of its decision on PILOTS, Penn could and should be making a more significant, more measurable contribution to the city’s schools.

1 Graham, Kristen, “Phila. District Spends Less Per Pupil Than Most Other Cities.” Philadelphia Inquirer, Jan. 17, 2015. Web May 2015. http://articles.philly.com/2015-01-17/news/58153804_1_palmer-leadership-learning- philadelphia-school-district-formula. 2 The Facts,” Fund Philly Schools, Accessed April 24, 2015, http://www.fundphillyschools.org/the-facts. 3 Motoko Rich, “Philadelphia Teachers Hit by Latest Cuts,” The New York Times, October 14, 2014, accessed April 24, 2015, http://www.nytimes.com/2014/10/15/us/philadelphia-teachers-hit-by-latest-cuts.html. 4 Motoko Rich and Jon Hurdle, “Philadelphia Schools to Open on Time Amid Millions in Budget Cuts,” The New York Times, August 15, 2014, accessed April 24, 2015, http://www.nytimes.com/2014/08/16/us/philadelphia- schools-to-open-on-time-amid-millions-in-budget-cuts.html. 4

Because property taxes make up roughly half of school district funding, the exemption of the city’s wealthy “eds and meds” from paying property taxes has become a much-debated part of the discourse around the school funding crisis. The legal definition of a non-profit, or “purely charitable,” institution in Pennsylvania is highly contested and has changed several times. In

1985, the Pennsylvania Supreme Court ruled in Hospital Utilization Project v. Commonwealth that non-profits are required to meet five criteria to qualify for tax-exempt status. This “HUP

Test” stipulates that a nonprofit institution must:

1. Advance a charitable purpose

2. Freely donate a substantial portion of its services

3. Benefit a substantial and indefinite class of persons who are legitimate subjects of charity

4. Relieve the government of some of its burden

5. Operate entirely free from private profit motive5

During a severe budget crisis for the city in the late 1980’s, Mayor Ed Rendell used this court ruling (and the potential it offered to contest the nonprofit status of institutions that might not fully meet these criteria) to negotiate Payments in Lieu of Taxes (PILOT) agreements with a number of Philadelphia’s “ed and meds.” During this period the University of Pennsylvania agreed to make annual contributions of $1.93 million to the city for five years.6 After legislators in Harrisburg passed a law limiting the ability of cities to determine the tax-exempt status of non- profits, however, the city no longer continued to require institutions like Penn to make PILOT payments. Then in 2012, the Supreme Court of Pennsylvania struck down that law; and the

5 Lisa Petkun, “What is a Purely Public Charity in Pennsylvania?,” Law Firm of Pepper Hamilton, September 12, 2001, accessed May 2015, www.pepperlaw.com/publications/what-is-a-purely-public-charity-in-pennsylvania-2001- 12-09/. 6Prameet Kumar, "Exploring Penn's financial contribution to the city." The Daily Pennsylvanian (Philadelphia, PA), March 27, 2012. 5 option of asking wealthy nonprofits to make PILOTS was once again on the table.7 In the context of the sharply worsening financial crisis for the school district, advocates such as Donna Cooper,

Executive Director of Public Citizens for Children and Youth (and a former member of Rendell’s mayoral and gubernatorial staff), argued that they should do so.8 As discussed below, the

University has put forward several different lines of argument against such proposals, while at the same time quietly supporting another effort to pass state legislation that would allow the legislature, rather than the courts, to define nonprofit status.

In mounting their case against PILOTs, Penn and several other institutions of higher education in the Philadelphia area commissioned a study and report on their contributions to the city by Econsult Solutions, Inc.. This report, The City of Philadelphia and its Higher Eds:

Shared Goals, Shared Missions, Shared Results, released on October 17, 2013, argued that local universities have already done an excellent job of meeting educational and civic missions without paying PILOTs. It concluded that PILOTs would be detrimental to higher education nonprofits and the City of Philadelphia alike.9

In the Spring 2014 semester, a team of three students in PSCI 335 wrote a paper that took an in-depth look at the PILOTs debate and argued in favor of Penn taking the lead in supporting the city and its schools through PILOTs. In the present paper, also written for PSCI 335, we delve further into Penn’s arguments and examine three major claims that the university upholds in defense of their position against PILOTs. We begin by looking into the claim that Penn

7 Will Bunch, “Eds, Meds, Taxes Fuel Protest,” Philly Daily News, January 21, 2015, accessed May 2015, http://articles.philly.com/2015-01-21/news/58272449_1_local-nonprofits-pennsylvania-supreme-court-pilot- payments. 8 Susan Snyder, “A Debate on Raising Funds From City’s Universities and Nonprofits,” Philadelphia Inquirer, September 27, 2013, accessed April 2013, http://articles.philly.com/2013-09-27/news/42430184_1_penn-alexander- nonprofits-property-taxes.

9 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results," September 18, 2013, http://www.econsultsolutions.com/report/35740/. 6 supports Philadelphia through the wage tax and does not need to provide additional contributions through PILOTs. Then, we take a look at the argument that the university already makes adequate contributions to the city and its schools through the support that Penn provides the

Sadie Tanner Mossell Alexander University of Pennsylvania Partnership School and the Netter

Center for Community Partnerships. Lastly, we analyze the idea put forward in the Econsult report that PILOT programs inevitably involve a transactional approach to city/university relations that would turn partners into adversaries, resulting in conflict rather than in mutual service. In the following pages, we provide additional background and analysis with regard to these claims. While we remain agnostic about whether PILOTs are the best way that the

University of Pennsylvania could provide support to the School District, we argue that the claims presented by the University as reasons against making PILOTs are unconvincing. As a highly endowed, elite institution with a strong commitment to civic engagement, Penn should be making a more significant, measurable contribution to the city’s schools; if not through PILOTS, then by other means.

CLAIM 1 Since the University of Pennsylvania provides sufficient economic contributions to Philadelphia through the wage tax, it does not need to provide additional contributions through PILOTs

The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared

Results, a study funded by the University of Pennsylvania and other local colleges and universities, argues that these institutions provide significant financial contributions to the city; and thus, that there is no fiscal responsibility to provide additional contributions through PILOTs.

The report cites the contributions made to the city by these institutions’ capital projects, 7 attraction of visitors, and employment of city residents.10 In addition, it argues that the city of

Philadelphia with its heavier reliance on wage taxes than property taxes represents a very different fiscal setting than East Coast cities with PILOT programs, such as Boston and

Providence, whose budgets are almost entirely dependent on property taxes. In Boston, for example, 91% of all tax revenue comes from property taxes, despite 50% of all property holding tax-exempt status.11 The scarcity of taxable property in Boston left the city’s tax-base insufficiently supported and its budget in peril.12 In these circumstances the use of PILOTs became a means for wealthy nonprofits to shore up Boston’s tax base. The situation in

Philadelphia, however, the Econsult report argues, is very different.

BACKGROUND: In Philadelphia, the tax structure and the economic impact of nonprofits are indeed different from those of Boston. Philadelphia receives tax revenue from at least five different avenues (property, wage, sales, business, and real estate transfer).13 The property tax in

Philadelphia represents about 29% of the city’s revenue; the wage tax, 43%.14 Higher eds in

Philadelphia highlight their contribution to the wage tax base, the greatest source of income for the city, as a key contribution to the city’s budget. According to the Econsult Solutions, Inc.

10 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results," September 18, 2013, 6, http://www.econsultsolutions.com/report/35740/. 11 Yolanda Perez, et. al. Tax Exempt Property in Boston: Analysis of Types, Uses, and Issues. Rep. no. 562. Boston Redevelopment Authority, Dec. 2002, accessed May 3, 2015, 1. http://www.bostonredevelopmentauthority.org/getattachment/e4373a7a-6330-401f-96b4-3de1293ea88a/. 12 Ibid, 4. 13 Jack Cahn, "Penn's Wage Tax Contributions Fly past PILOT Controversy," The Daily Pennsylvanian, February 19, 2015, accessed April 8, 2015, http://www.thedp.com/article/2015/02/penn-contributes-106-million-to-philadelphia- in-total-tax-revenue. 14 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results," September 18, 2013, http://www.econsultsolutions.com/report/35740/. 8 report, higher eds in Philadelphia annually generate an estimated economic impact of $10.9 billion, provide 84,000 jobs, and supply $211 million in city tax revenues.15

Of these institutions of higher education, the University of Pennsylvania has the greatest impact on the City of Philadelphia. With roughly 32,000 employees, Penn is the largest private employer in the city.16 In the 2014 fiscal year, Penn employees from the University and hospital network generated $106 million in tax revenue for the city, and in total, contributed roughly 8% of all wage taxes collected in Philadelphia.17 Clearly, it cannot be disputed the Penn community provides notable economic assets for the city; its employees are responsible for a significant financial contribution to the city’s budget, which is currently relatively stable. Although

Philadelphia had a negative net position (total assets minus total liabilities) of $86.2 million for the 2014 fiscal year, the actual total revenue for the city increased by $157.5 million, with $41.1 million coming from wage and earning taxes.18 While the city’s deficit is certainly not ideal, through taxpayer contributions, federal and state government aid, and other subsidization programs, the city is able to compensate for its current debt and is capable of sustaining itself.19

Additionally the city’s five-year plan projects a 4.8% increase in wage and earnings tax revenue, a 20% increase in real estate transfer tax (a “sales tax for real estate”) and a 3% growth in business income and receipts tax.20 For these reasons, overall funding for the Philadelphia economy is fairly secure and stable.

15 Ibid, 8. 16 Select Greater Philadelphia, “Leading Employers,” Aug. 13, 2014, accessed April 7, 2015, http://www.selectgreaterphiladelphia.com/industries/leading-employers/. 17 Cahn, "Penn's Wage Tax Contributions Fly past PILOT Controversy." http://www.thedp.com/article/2015/02/penn-contributes-106-million-to-philadelphia-in-total-tax-revenue. 18 Rob Dubow and Josefine Arevalo, Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2014, Rep. City of Philadelphia PA, June 30, 2014.15-20, accessed April 8, 2015, http://www.phila.gov/finance/pdfs/2014ComprehensiveAnnualFinancialReportCAFR.pdf. 19 Ibid. 20 Ibid. 9

ANALYSIS: While these numbers make it clear that the city’s budget does benefit from wage taxes, the revenue collected from wage taxes comes from individuals employed by the city’s eds and meds; these are not contributions made to the city by these institutions themselves.21 It is, therefore, inaccurate for the University of Pennsylvania and the city’s other wealthy universities and hospitals to claim their employees’ payments in wage taxes as justification for these institutions not making any payments in lieu of property taxes, which do in fact compose almost a third (29%) of the entire city’s tax base.

Moreover, the heavy reliance on wage taxes as a source of city revenue is an issue that has been highly contested in Philadelphia over the past 20 years. The wage tax was first introduced as an “innovative” approach for offsetting the effects of the Great Depression.

However, the gradual rise from 1.5% to 4.96% provoked policymakers to call for reform.22

Those who see a high wage tax as a hindrance to keeping businesses in the city favor shifting tax revenue reliance to “immobile assets” such as property.23 Following former Mayor Ed Rendell’s term in office in 1992, the percentage of wage tax has steadily decreased every other year to where it now sits at 3.92%.24 In his 2016-2017 budget plan, newly elected Governor Tom Wolf plans to revamp Philadelphia’s tax structure; and, as with the prior trend, the wage tax is set to decrease to 3.36%.25 The ultimate future of the wage tax is still uncertain. If it continues to

21 Marietta Catsambas, Debby Chiang, and Leyla Mocan, “The University of Pennsylvania and Payments in Lieu of Taxes: An Examination of the University’s Role in Leading the Way in Philadelphia,” Columbia University Journal of Politics & Society (2015): 13, accessed April 12, 2015, http://www.helvidius.org/2015/04/12/the-university- of-pennsylvania-and-payments-in-lieu-of-taxes/. 22 Christopher Wink, “Philly’s city wage tax just turned 75. Here’s its dubious legacy,” Technical.ly Philly, December 12, 2014, accessed May 7, 2015, http://technical.ly/philly/2014/12/12/philadelphia-city-wage-tax/. 23 Wink, “Philly’s city wage tax just turned 75.” 24 Ibid. 25 Holly Otterbein, “Tom Wolf’s Incredible Plan to Overhaul Philly Taxes,” Citified, March 4, 2015, accessed May 7, 2015, http://www.phillymag.com/citified/2015/03/04/tom-wolf-philadelphia-tax-plan/. 10 decrease, the importance of nonprofits’ employees’ contributions to the wage tax as a component of the city’s tax base will be diminished.

Even with the current tax revenue streams, it is important to recognize how much property tax-exemptions impact the city. Philadelphia’s tax base suffers not only because it is the poorest big city in the United States, but also because the city has the nation’s highest percent

(10.8%) of tax-exempt nonprofit property,26 worth a total $21.5 billion.27 () Penn specifically holds almost 1000 acres of property in Philadelphia (excluding the hospital),28 but it only pays taxes on the 334,000 square feet of this real estate that are rented out to “for profit” businesses.29

As a “nonprofit,” Penn and similar institutions are able to obtain tax-exemption on roughly $30.6 million of property.30 Further, through the implementation of the Ten Year Tax Abatement program throughout the city, even for-profit businesses are now able to cut back their contributions to the property tax base. This program gives large building owners and developers a “10-year pass on property taxes” for construction and/or renovations.31 All of this results in a large and relatively devastating deficit in the property tax revenue--of which roughly 60% are used to finance the city’s public schools.

26 Note that this figure does not include government held tax-exempt land, which the Boston figure of 50% tax- exempt property, mentioned on p. 6 above, does. Laura Legere, "Why Do Cities Solicit PILOTs and Why Do Nonprofits Dislike the Idea?" Keystone Crossroads, January 12, 2015, accessed April 7, 2015, http://crossroads.newsworks.org/index.php/local/keystone-crossroads/77173-why-do-cities-solicit-pilots-and-why- do-nonprofits-dislike-the-idea. 27 Holly Otterbein, "Nonprofits Flagged by IRS Still Get Property-tax Pass in Philly," Newsworks WHYY, January 9, 2013, accessed April 7, 2015, http://www.newsworks.org/index.php/local/the-latest/49253-philadelphia-gives- flagged-nonprofits-a-pass-on-property-taxes. 28 "Penn Facts," University of Pennsylvania, The Trustees of the University of Pennsylvania, accessed April 8, 2015, http://www.upenn.edu/about/facts.php. 29 "How Much Retail Is Actually Owned by Penn?" Penn Current, University of Pennsylvania, December 13, 2012, accessed April 8, 2015, http://www.upenn.edu/pennnews/current/2012-12-13/ask-benny/how-much-retail-actually- owned-penn. 30 Daniel Denvir, "How Big Business Helps Starve Philly Schools," Philadelphia Citypaper, June 26, 2013, April 8, 2015, http://citypaper.net/how-big-business-helps-starve-philly-schools/. 31 “How the 10-Year Tax Abatement Underwrites, and Luxury Developments And Starves School,” Short-Changing Philadelphia Students: (n.d.): n. pag. The Philadelphia Coalition Advocating for Public Schools, Oct. 2013. 11

Thus, the erosion of the property tax base, together with inadequate state funding, represent key reasons why the Philadelphia School District is running such deficits. "This

[financial crisis] is not arising because the district is spending its money wastefully,” Michael

Churchill, a lawyer at the Public Interest Law Center of Pennsylvania, has declared. “This is arising because the basic cost of education has been rising and the funding has not…it’s a prescription for disaster for students."32

In short, the fact that Penn employees pay wage taxes does not represent a sufficient institutional contribution to a city that is facing the crisis in its schools that Philadelphia is. Penn employees’ wage taxes do not justify the university’s refusal to provide PILOTS to the School

District, when the District’s chief source of local revenue is property taxes and Penn holds millions of dollars in untaxed property. As a “nonprofit” under the definition of the “HUP Test,” the University must “relieve the city of some of its burden.”33 By disregarding how critical it is to address the desperate financial needs of the city’s schools, Penn is failing to relieve the city’s burden.

CLAIM 2 The University already makes adequate contributions to the School District through the Penn Alexander School.

One of the University of Pennsylvania’s primary arguments against paying PILOTs is that the university already provides the school district with substantial support through the Penn

Alexander School. In response to a student protest demanding that Penn pay PILOTs at President

32 Denisa R. Superville, “School Budget Problems Have Deep Roots in Philadelphia,” Education Week, May 6, 2014, accessed May 2015, http://www.edweek.org/ew/articles/2014/05/07/30philly.h33.html. 33 Petkun, “What is a Purely Public Charity in Pennsylvania?” 12

Amy Gutmann’s annual holiday party in December of 2014, Gutmann defended Penn’s decision not to pay PILOTs with the statement, “We are very proud of what we’ve done with the Penn

Alexander School.”34 Gutmann’s statement suggests that Penn’s role in the creation of Penn

Alexander and its ongoing support for the school represent a key justification for the university’s refusal to make PILOT payments to the school district. Penn Alexander is clearly a school to be proud of. Nonetheless the impact of Penn Alexander’s success on its low income neighbors has come under fire in ways that suggest the problems with Penn’s choosing to make significant financial contributions to only one school in a district that faces Philadelphia’s challenges.

BACKGROUND: The idea for the Penn Alexander School started as a component of Penn’s efforts to improve the West Philadelphia neighborhood around Penn. Following a crime spike in the area during the 1980s and 90s, the West Philadelphia Initiatives sought to make the neighborhood more stable and safe by stimulating reinvestment in the West Philadelphia economy. 35 Although

Penn claimed these initiatives would benefit the impoverished families in the area, the university did not shy away from stating an intention to encourage more middle-class families and Penn employees to settle there. These new residents, Penn urged, would strengthen the neighborhood by “revitalizing its historic housing stock, reducing vacancy, and fueling commercial activity.”36

Penn realized that the quality of public schools and the availability of school options would have

34Jennifer Wright, “Protesters take over Gutmann’s holiday party,” The Daily Pennsylvanian, December 9, 2014, accessed April 2, 2015, http://www.thedp.com/article/2014/12/protesters-take-over-gutmanns-holiday-party. 35 Bill Green, “Investing in Philadelphia’s Future: The Case for Comprehensive Education Reform” (paper presented to Philadelphia City Council, Philadelphia, Pennsylvania, May 2010); John Kromer and Lucy Kerman, “West Philadelphia Initiatives: A Case Study in Urban Revitalization,” 2004. http://www.fels.upenn.edu/news/new-report- urban-revitalization-1. 36 Green, “Investing in Philadelphia’s Future: The Case for Comprehensive Education Reform”; Kromer and Kerman, “West Philadelphia Initiatives: A Case Study in Urban Revitalization,” 2004. http://www.fels.upenn.edu/news/new-report-urban-revitalization-1. 13 a critical impact on their ability to recruit such residents, as well as the economic stability and social well-being of the neighborhood.37

In line with this effort to make its immediate neighborhood attractive to its faculty and employees, Penn decided in the late 1990s to partner with the School District of Philadelphia and the Philadelphia Federation of Teachers to create a K-8 public school that the university would support with direct and in-kind contributions. Specifically, the University of Pennsylvania agreed to lease land to the school district for $1 per year and to provide up to $700,000 in annual operating support for the new school for ten years.38 More recently, that agreement was extended through 2021.39 Penn would also offer academic support through its Graduate School of

Education. The Sadie Tanner Mossell Alexander University of Pennsylvania Partnership School officially fully opened its doors to West Philadelphia in the fall of 2004. Although the idea of a partnership between a public school and a university is not new, Penn Alexander has gone beyond any other such partnership effort. The University of Pennsylvania selected Penn

Alexander’s principal; and each year, Penn provides about $1,330 per student.40 Penn Alexander also regularly benefits from team teaching, mentoring teachers-in-training, graduate study, and the latest research from the Graduate School of Education at Penn.41

Since its opening, the school has shown some impressive results. Penn Alexander has an excellent reputation with some of the highest test scores in the city. In 2009 there was virtually no gap between the test scores of economically disadvantaged students and their more

37 John Kromer and Lucy Kerman, “West Philadelphia Initiatives: A Case Study in Urban Revitalization,” 2004. http://www.fels.upenn.edu/news/new-report-urban-revitalization-1. 38 Judith Rodin, “Investing in Public Education,” in The University & Urban Revival, ed. Eugenie L. Birch and Susan M. Wachter, (Philadelphia: University of Pennsylvania Press, 2007), 151. 39 Julie McWilliams, “Penn Alexander Partnership Extended Through 2021,” Penn Currant, June 23, 2011, accessed May 2015, http://www.upenn.edu/pennnews/current/2011-06-23/latest-news/penn-alexander-partnership-extended- through-2021. 40 Claire Cohen, “Four reasons why Penn Alexander is important,” The Daily Pennsylvanian, February 27, 2014, accessed April 2, 2015, http://www.thedp.com/article/2014/02/four-things-penn-alexander. 41 Green,“Investing in Philadelphia’s Future.” 14 advantaged peers. In fact, 83.9% of economically disadvantaged students met or exceeded proficiency standards on state reading tests and 84% did so in math.42 The school boasts a student-teacher ratio of 17:1 in kindergarten and 23:1 in all other grades, allowing for the individual attention that other schools in the district lack.43 The curriculum goes beyond math and language arts to include social studies, science, technology, physical education, art, music, and even Spanish. The school has a well-appointed library, a multimedia center, 3 computer labs,

2 playgrounds, 2 gardens, an atrium, and full-time technology and arts specialists.44

ANALYSIS: In the first several years after the school opened, real estate prices within the Penn

Alexander catchment zone nearly tripled and home ownership rose 6%.45 Families have paid up to $100,000 extra per house to live in the Penn Alexander feeder area.46 Penn’s partnership school has rejuvenated the neighborhood, but many lower-income residents have been priced out of the area. Critics argue that the result is decreased diversity, as working-class black families move out and middle-class white families move into the catchment area.47 Between 2000 and

2010, census data shows that the total catchment population increased by 14%, with the African-

42 “Designing an Exemplar: University of Pennsylvania and the Penn Alexander School,” February 25, 2014, http://www.learningfirst.org/designing-exemplar-university-pennsylvania-and-penn-alexander-school. 43 Ibid. 44 Ibid. 45 Ibid. 46 Dale Mezzacappa, “Admission to coveted Penn Alexander now by lottery,” The Philadelphia Public School Notebook, January 18, 2013, accessed April 12, 2015, http://thenotebook.org/blog/135527/admission-penn- alexander-now-by-lottery. 47 Maia Cucchiara, “New Goals, Familiar Challenges?: A Brief History of University-Run Schools,” Perspectives on Urban Education (Summer 2010): 101 15

American population in the area declining by 43% and the white population increasing by 48%.48

For every dollar that Penn invested in the school, the private real estate market reaped $3.49

Additionally, although Penn Alexander at first guaranteed admission to any student who lived within the specified catchment area around the school, the admission policy has since changed. As the school’s popularity increased and more families with children moved into the area, demand for seats at the school began to exceed the number available. As a result, registration dates were established and students were accepted on a first-come, first-serve basis.

The stakes got so high that parents started lining up outside the school on early Friday morning for registration that didn’t start until Tuesday.50 In the interest of “fairness and safety,” school district officials decided to change the process and implement a lottery system within the catchment zone in 2013.51 One of the effects the school’s popularity has had is on the two homeless shelters that fall within Penn Alexander’s catchment zone. While the school used to guarantee the children in these shelters admission to the school, there are no such guarantees with the new lottery system.

Looking at the bigger picture and placing it in the context of PILOTs, supporting the

Penn Alexander School is not a substitute for supporting the school district more broadly. While

Penn Alexander itself is a great school, its success underlines the fact that with greater support, all the city’s schools could be serving the children who attend them far better. As long as it continues to represent such an isolated case of a successful neighborhood school in a devastated public school system, Penn Alexander’s popularity (and the resulting rising real estate prices)

48 Ken Steif, “Can the success of Penn Alexander be replicated?” The Philadelphia Public School Notebook, April 8, 2013, accessed April 2, 2015, http://thenotebook.org/blog/135769/school-improvement-districts-can-success-penn- alexander-school-be-replicated. 49 Ibid. 50 Mezzacappa, “Admission to coveted Penn Alexander.” 51 Ibid. 16 will continue to result in significant problems for low-income families in its own neighborhood.

Penn should not be focused only on one small catchment zone in a school district that is so desperately under-funded throughout the city. Penn should be taking the lead in working with other higher eds to use some of their resources in partnerships with the School District to make all Philadelphia schools great.

Just four blocks down from Penn Alexander, Lea Elementary is struggling to show the same success as Penn Alexander, despite Lea’s long-term relationship with both Penn’s Graduate

School of Education and Penn’s Netter Center for Community Partnerships and an additional status, established in 2013 as a university-partnership school. The most significant difference between the support Penn provides Penn Alexander and the support it provides Lea is financial funding. The partnership with Lea is aimed at providing nonmonetary resources to the school community and does not include any direct monetary assistance.52 The differences in classroom resources and outcomes at Penn Alexander, compared to Lea suggest that guaranteeing stable funding makes a significant difference in the success of a school. The problems faced by Lea, even with some significant support from Penn, underline the extent to which Penn Alexander is an isolated case. Although PILOTs may not necessarily be the solution, Penn needs to reevaluate the claim that Penn Alexander is enough. As Maurice Jones, president of the Lea Home and

School Association, so eloquently put it, “…Penn does a good job in a number of things, but

Penn has the ability and the responsibility to do more. [Penn] is an incubator in the neighborhood.

Most of the Ivy League schools don’t have that opportunity to affect public education, especially in one of the biggest cities in the country.”53

52 Will Marble, “Penn to extend its programming at Henry C. Lea School,” The Daily Pennsylvanian, July 2, 2013, accessed April 22, 2015, http://www.thedp.com/article/2013/07/more-aid-to-lea-elementary. 53 Clare Lombardo, “Taking Attendance: Examining Penn’s Role in West Philly Schools,” 34th Street Magazine, October 16, 2014, accessed April 22, 2015, http://www.34st.com/article/2014/10/taking-attendance-public-schools. 17

Making a commitment to helping all its neighborhood schools thrive, with attention to measurable outcomes and benchmarks, would be a far more significant contribution to the city of

Philadelphia and its citizens, than pouring resources into only one school, that serves the children in its immediate neighborhood so well, but whose demographics are no longer those of other

West Philadelphia neighborhoods. In addition, as Mr. Jones underlines, taking its responsibilities to its neighbors more seriously would put Penn as a university in a position to play a far more major role in national conversations with regard to best approaches and practices for improving urban education.

CLAIM 3 The University of Pennsylvania’s services through the Netter Center for Community Partnerships are more Democratic and mutually beneficial than PILOTs.

One of the justifications that University of Pennsylvania spokespersons repeatedly cite for not paying PILOTS is that Penn provides many direct services to the Philadelphia community, especially through the Barbara and Edward Netter Center for Community Partnerships. Dr. Ira

Harkavy, Associate Vice President and founding Director of the Center, champions the idea that the University can best fulfill one of its core missions, educating students to become constructive, democratic citizens, by encouraging democratic, mutually beneficial relationships with the

Philadelphia community.54 The Netter Center seeks to promote such relationships by providing opportunities for students and faculty to engage with the local community in analyzing and developing solutions to the complex problems the community faces. The primary vehicle for this engagement is through Academically Based Community Service (ABCS) courses that integrate service with research, teaching, and learning. During the 2013-2014 academic year, the

54 Ira Harkavy, interviewed by Ashley Van and Nopakit Lerthirunvibul, Philadelphia, PA, March 27, 2015. 18

University of Pennsylvania offered 65 ABCS courses across 25 departments and 9 schools.

These courses were created with the intention of giving students the opportunity to learn from their service experience while also benefiting the organizations and institutions with which they engage. For example, the ABCS course, Community Physics Initiative, allowed Penn students to create and teach weekly lessons and laboratory exercises at a local high school.55

In addition to encouraging the development of ABCS courses on campus, the Netter

Center strives to promote “democratic relationships” with the Philadelphia community through its model for university-assisted community schools (UACSs). 56 The Netter Center has developed this model through writing grants to support after school programs and other programming in local public schools. These grants support the salaries of after school staff and

“community school directors,” whose responsibilities including running the after school programs and working with principals and staff to coordinate a wide range of Penn initiatives at these schools. The Netter Center strongly encourages Penn faculty and students to work with these UACSs to develop programs that meet the school’s and its community’s needs.

The number of UACSs supported by the Netter Center has varied over the years, depending on how many grants the Netter Center receives. Currently, there are five university- assisted schools: Benjamin B. Comegys School, Samuel B. Huey School, Henry C. Lea School,

William L. Sayre High School, and West Philadelphia High School. Netter Center staff members write grants to support programs like the Agatston Urban Nutrition Initiative (AUNI), Moelis

Access Science, and College Access and Career Readiness that develop both school day and after school programs in these schools with the goal of enhancing their educational resources and

55 Ira Harkavy et al., “The Promise of University-Assisted Community Schools to Transform American Schooling: A Report from the Field, 1985-2012,” Peabody Journal of Education 88:5 (2013): 531. 56 Ira Harkavy, interviewed by Ashley Van, Philadelphia, PA, March 27, 2015. 19 encouraging community engagement and democratic development.57 The Netter Center sponsored Community School Student Partnerships (CSSP) undergraduate organization seeks to address the low literacy rate and poor tests scores of students in the UACSs through training and supporting Penn student tutors and mentors, who work with children in both school day and after school programs.

According to Dr. Harkavy, the direct engagement with Philadelphia’s public schools promoted through the Netter Center’s model for UACSs has created a “partnership of trust.” He argues that PILOTs would create a “transactional relationship” that could threaten this trust: the expectation of PILOT payments from the university would “commodify” the relationship between the university and the community, turning what should be a mutually beneficial relationship into a narrow financial transaction. He warns that this type of financial relationship between the university and the city would contribute to a wrongful image that the university and its work represent a commodity to be utilized solely for economic gains by both students and the community. 58

BACKGROUND: The Netter Center claims that its various programs have been successful in alleviating some of the many problems that plague the city of Philadelphia and its school district, as well as significantly enhancing the education of Penn students. As evidence for the latter, it offers the self-reported outcomes for undergraduates who participated in ABCS courses. According to one survey, 47% noted an increase in research skills as opposed to 36% of non-ABCS students.

Students in ABCS courses also reported an increased desire to act morally and ethically and to

57 “University-Assisted Community Schools,” Netter Center for Community Partnerships, accessed May 5, 2015, https://www.nettercenter.upenn.edu/programs/university-assisted-community-schools. 58 Ira Harkavy, interviewed by Ashley Van and Nopakit Lerthirunvibul, Philadelphia, PA, March 27, 2015. 20 become an effective community leader.59 A survey of students participating in the Moelis

Access Science program reported an increased ability to present science and math ideas and to work with adolescents (95%); 100% reported an increase in communication skills.60

At the community-level, the Netter Center cites benefits to local adults and children, most especially from health and education programs. For instance, the Dance for Health program collaboration between Sayre High School and Penn Nursing helped 300 community residents between 2011 and 2015 become more physically active with some women reporting weight loss.61 Netter Center personnel played a major role in writing a proposal that resulted in the establishment of the Sayre Health Center, a federally funded neighborhood health center, staffed by Penn affiliated medical personnel at Sayre High School. This Health Center has served over

2,000 residents and provided health education to numerous Sayre High School students. AUNI aims to empower youth and community members to promote healthy lifestyles through cooking, gardening, fruit stand, and nutrition education programs. In addition, AUNI makes it possible for

14 families to receive locally grown fruits and vegetables each week.

As evidence for the efficacy of its work in the schools, the Netter Center cites surveys of children and staff who have participated in its programs. A survey of “teachers and 466 K-8 students enrolled in one of four afterschool programs” during the 2009-10 school year, for example, “reported that of the participating students who needed to improve, 72% showed improvement in their academic performance and 66% of the students improved their participation in class.” High percentages of these children also reported that the after school

59 Harkavy et al, “The Promise of University-Assisted Community Schools,” 531. 60 Ibid. 61 Cory Bowman, Assistant Director of the Netter Center for Community Partnerships, e-mail message to Ashley Van, April 6, 2015. 21 program helped them with homework, confidence, interest in school and attendance.62 A few years later the Center’s Evaluation Team’ conducted a 2013-2014 survey of 285 students who participated in CSSP-supported tutoring programs across the three K-8 UACSs, Lea, Comegys, and Huey. This survey concluded that a majority of these students maintained a C or better or made some level of achievement in both math and reading.63

Given Penn’s work with these schools through the Netter Center, Dr. Harkavy suggests that when asked to pay PILOTS, Penn can effectively say, “I gave at the office,” meaning that these types of programs are far more significant that the purely financial “transactional” relationships that he sees as the rationale for PILOTS.64

ANALYSIS: The Netter Center was founded in 1992 based on a strong commitment to the

University’s developing mutual beneficial relationships with the West Philadelphia community.

With a strong sense of moral urgency and a commitment to democratic ideals, its staff and associated faculty and students have held up their model for university assisted community schools as the key vehicle for realizing their ideals. They have written many grants and developed many programs for their partner schools; and they have partnered with major foundations to replicate this UACS model at multiple sites across the country.65 A 2012 article,

“The Promise of University-Assisted Community Schools to Transform American Schooling: A

Report from the Field, 1985-2012,” co-authored by Harkavy and several Center staff and faculty

62 Harkavy, et al.,“The Promise of University-Assisted Community Schools,” 532. 63 Cory Bowman, Assistant Director of the Netter Center for Community Partnerships, e-mail message to Ashley Van, April 6, 2015. 64 Ira Harkavy interview. 65 Harkavy et al, “The Promise of University-Assisted Community Schools,” (2012), 533-535. 22 associates, speaks powerfully to the ideals that they associate with the potential of this model, as their title suggests, to “transform American schooling.”

In reading this article and Netter Center reports, however, it is striking how little evidence they have to offer of any significant “transformation” of the schools where the Netter Center has been working for as much as twenty-five years. As opposed to the robust evidence in term of test scores for both low income and higher income children at Penn Alexander, the primary data that the Netter Center sites is in-house surveys of children and staff who have worked with specific

Netter Center programs. Except in one case, there is no data to suggest that their partnership with the university has benefitted these schools more generally. There is not even a clear account of how many schools have enjoyed a “university assisted community school” status, or over what exact period of time, perhaps because this status depends upon what grants the Netter Center secures for running after-school programs in its neighborhood schools in any individual year.

While the Netter Center offers virtually no evidence of the impact of its programs on its partner schools, school district data suggest that the performance of these schools has remained troublingly low. Each year, the School District of Philadelphia tracks individual schools’ progress based on several different numbers. One of these numbers, the “achievement” score, is based on children’s performance on standardized tests at several different grade levels with 100% being the highest possible score. According to the 2013-2014 School District of Philadelphia’s

School Progress Reports, students at Penn Alexander had an achievement score of 88%, whereas students at Lea had an achievement score of 16%.66 Huey scored 4%, and Comegys scored 9%.67

Additionally, the 2013-2014 PSSA Math and Reading scores of students grade 3 through 8 at

66 “SY 2013-2014 School Progress Report,” The School District of Philadelphia, accessed May 6, 2015, http://webgui.phila.k12.pa.us/offices/s/strategic-analytics/annual-reports/school-progress-reports/sy2013-2014- reports. 67 Ibid. 23

Lea show that all grades performed below the School District average.68 The same situation was true for both Comegys69 and Huey.70 It is clear that none of the Netter Center’s university assisted community elementary schools is thriving on anywhere near the terms that Penn

Alexander is. With regard to the statistics for the high schools that the Netter Center has worked with, University City High School’s graduation rate did rise by about 8% in 2012, but the three

(now two) high schools partnering with the Netter Center continue to have graduation rates lower than the citywide average of 64%. In 2013 University City High School was closed, West

Philadelphia High School’s graduation rate was 53%, and Sayre High School’s was 48%.71

Among the roughly 10% of Philadelphia’s public schools that have recently faced closure, three were Netter Center UACSs: the Drew school in 2012 and the Alexander Wilson School and

University City High School in 2013. Despite all the Netter Center’s grant writing, its remaining university-assisted community schools continue to lack after-school programs capable of serving more than a fraction of the children who attend these schools, and a sufficient number of nurses, counselors, teachers, and supplies.72

The one case for significant transformation of a school that “The Promise of University-

Assisted Community Schools” article offers is almost as troubling as its lack of such claims for all its other partnerships. In discussing the Center’s “college access and career readiness programs,” the authors focus on the case of the “Student Success Center at University City High

68 “School Profile: Henry C. Lea School, “ The School District of Philadelphia, accessed May 5, 2015, https://.webapps.philasd.org/school_profile/view/1340. 69 “School Profile: B. B. Comegys School,” The School District of Philadelphia, accessed May 5, 2015, https://webapps.philasd.org/school_profile/view/1260. 70 “School Profile: Samuel B. Huey School, The School District of Philadelphia, accessed May 5, 2015, https://webapps.philasd.org/school_profile/view/1330. 71 Paul Socolar, “2013 On-time Graduation Rates for District and Renaissance High Schools,” The Philadelphia Public School Notebook, last modified January 28, 2014, http://thenotebook.org/blog/146857/on-time-graduation- rates-2013-philadelphia-high-schools. 72 “The Facts,” Fund Philly Schools, accessed April 24, 2015, http://www.fundphillyschools.org/the-facts. 24

School (UCHS), which was established in 2010 with funding provided by the Department of

Labor”:

In 2011–12 Center staff mobilized 90 Penn and Drexel University students as graduation coaches to work one-on-one and with small groups of high school students. Four-year graduation rates at University City High School hover below 50%. Yet this team was able to help 94% of the 2011–12 senior class graduate, 70% of whom had postsecondary plans, and secure more than $740,000 in scholarship and grant awards. Over the last 3 years, the school’s AP and Honors course participation increased by 66% across grade levels and subject content . In addition average daily attendance rose from 71% in 2008–09 to 83% in 2011– 12.73

On first reading, this summary suggests the extraordinary claim that the Student Success Center succeeded in raising the school’s graduation rates from below 50% to 94% in one year. One of the article’s authors clarified, however that the 94% referred to the “completion rate of the senior class,” a finding whose significance is somewhat more difficult to assess without data from previous years.74 It is also troubling that the article associates all the improvements at the school with the work of the Student Success Center (as significant as it sounds like the work of this program was) without any discussion of the additional resources that the school received from the School District as part of its “Promise Academy Status.” It seems likely that there were other factors that help to explain the increasing numbers of AP and Honors classes and improved daily attendance at the school beginning in 2008, as the Student Success Center was not established until 2010. This failure to acknowledge improvements at the school within the context of the

School District’s own special initiatives extends further to a lack of any discussion of why the

District made a decision to close UCHS in 2013. If UCHS had truly been “transformed” by its

UACS status and the work of the Student Success Center, this decision should surely have merited some significant explanation; but instead the closing of the only school that the article

73 “The Facts,” Fund Philly Schools. 74 Email communication to Mary Summers from Matthew Hartley, June 20, 2015. 25 touts as having experienced significant positive change as the result of Netter Center programs is mentioned only in one terse footnote.75

There are undoubtedly many factors that make real progress in the performance of the

Netter Center’s UACSs extremely difficult. Addressing the many problems caused by the insufficient funding of these schools and the high poverty rates of their students is a tremendous challenge. In addition to these profound structural problems, however, we are concerned that what data there is, as well as our own experience and the reports we hear from other students and staff working with Netter Center programs, suggest that the Center’s inability to provide reliable, consistent staff and programming may actually be aggravating the instability that plagues

Philadelphia’s schools.

First, the disparity between the university’s academic calendar and the School District’s schedule greatly impacts the Center’s ability to establish long-term commitments. At their best,

ABCS courses encourage Penn students to think about the problems they see in Philadelphia’s public schools, but the semester-length schedule means that these students will typically partner with a classroom or a program for less than 10 weeks of the school year. Even the Netter

Center’s ongoing programs like AUNI and Access Science rely heavily on student staff, whose schedules and priorities almost inevitably change from semester to semester.

In addition to the problems presented by attempting to staff programs with college students whose schedules and calendars vary so widely from those of public schools, it is difficult to maintain and staff school-based programs whose funding depends on Netter Center grant writing on a stable, long-term basis. According to its 2012 Financial Report, the Netter

Center received $1.4 million from the University of Pennsylvania with the majority of its $4.1

75 Harkavy et al, 2012, 532. 26 million budget coming from grants and gifts.76 Each of the Netter Center’s university assisted community school partnerships depends on winning grants through which the “community school directors” and their staff are paid. When funding for Huey’s after school program did not come through for the fall of 2014, for example, the director of that program was laid off and then rehired when grant funding came through in 2015.77 This type of instability not only makes it very difficult for the community school director to create a comprehensive plan for school programming, but also contributes to the “churn” that makes it so difficult for staff and children to build positive relationships in under-funded, under-staffed city schools.

The Netter Center is clearly committed to the idea of university-community partnerships that would serve as a conduit for “strategic sources of broadly based, comprehensive, sustained” university support for community schools.78 The on-the-ground reality, however, is that it has provided neighborhood schools with programs that more or less fit Penn students’ schedules and funders’ priorities. It has failed to engage many of the more fundamental problems that these schools face. Urban education scholar, Charles Payne has described urban schools that adorn themselves with program after program as “Christmas tree” schools: schools overwhelmed with initiating far more programs than they can actually coordinate and manage effectively. This phenomenon, he argues, can exacerbate rather than solve one of the “most important characteristics of bottom-tier schools: their inability to follow through with the programs.”79

With schools that have been failing for so long, even programs that have resulted in initial successes are not sustained over time, if there are too many to be managed effectively by a

76 “Financial Report,” in Annual Report 2010-2012 Netter Center for Community Partnerships, 18. 77 Mary Summers, personal conversation with Ashley Van, May 5, 2015. 78 “University-Assisted Community Schools,” The Netter Center for Community Partnerships, accessed May 2015, https://www.nettercenter.upenn.edu/programs/university-assisted-community-schools. 79 Charles Payne, So Much Reform, So Little Change: The Persistence of Failure in Urban Schools (Cambridge: Harvard Education Press, 2008), 177. 27 demoralized staff with high turnover rates.80 The high rates of school closings and principal turnover with little progress in overall student test scores at schools with which Netter has been partnering in some cases for more than 20 years suggest that while well-meaning, the Netter

Center’s efforts to foster so many different programs in low-performing schools may sometimes have the potential to exacerbate problems rather than solve them.

Without evidence establishing the efficacy of the Netter Center’s engagement with the

School District of Philadelphia, it cannot be claimed that Academically Based Community

Service courses and University Assisted Community Schools effectively provide better support for Philadelphia’s schools than Payments In Lieu Of Taxes. In fact, the School District of

Philadelphia’s lack of funds is undoubtedly a contributing factor to the Netter Center’s difficulties in establishing more meaningful, long-term partnerships with its neighborhood schools. Schools whose principals change from year to year, schools that lack secretaries to answer the phone, much less teacher partners with the time and energy to engage in developing joint projects and curriculum simply do not have the resources to engage in the kind of “mutually beneficial democratic partnerships” that the Netter Center envisions, even if the Netter Center’s funding, programming and staffing were far more stable and reliable. Ultimately, it is impossible to have successful ABCS classes that engage with the school district without stable, functional public schools. As an institution that seeks to advance education and democracy, the University of Pennsylvania cannot continue to use its “Christmas Tree schools” as a justification for its refusal to pay PILOTs.

CLAIM 4 PILOTs would create a transactional relationship that would turn the city and the University into adversaries, expending time and resources in conflict rather than in mutual service.

80 Payne, So Much Reform, So Little Change: The Persistence of Failure in Urban Schools, 178. 28

In addition to arguments based on the contributions that the University of Pennsylvania already makes to the surrounding community, one of the primary concerns expressed by both spokespersons for the university and by the Econsult Solutions, Inc. report is that a PILOT agreement would fundamentally alter the relationship between Penn and the City of Philadelphia.

The research paper published by Penn students for PSCI 335 2014 addressed the concern that

PILOT payments might force the university to cut back on some of the contributions that it currently makes to the city by suggesting that Penn consider the Boston method of calculating

PILOTs.81 With this method, the city asks nonprofits to pay 25% of what their property tax would be without any exemptions, and then allows for further reductions based on nonprofit spending that directly benefits Boston residents.82 Such an arrangement would not make significant dents in Penn’s finances or its commitments to community engagement.83

The Econsult Solutions, Inc. report, however, sharply rejects Boston’s model for the relationship between a city and its nonprofits. According to the report, the widespread use of

PILOT agreements in Boston is a byproduct of Boston’s heavy dependence on property taxes: a response, they argue, that results in an uninspired “transactional” relationship between Boston and its nonprofits. The Econsult report juxtaposes what it characterizes as the limited financial relationships inherent in this “Boston Model” with the “strong working partnerships” of the current “Philadelphia Model.” In addition, the report uses case histories from several other cities

81 Marietta Catsambas, Debby Chiang, and Leyla Mocan. "The University of Pennsylvania and Payments in Lieu of Taxes,” Journal of Politics & Society (2015): n. pag. Helvidius Group, accessed April 8, 2015, http://www.helvidius.org/2015/04/12/the-university-of-pennsylvania-and-payments-in-lieu-of-taxes/. 82 Mayor's PILOT Task Force, “Mayor’s PILOT Task Force: Final Report & Recommendations,” Rep. N.p., 17 Dec. 2010, accessed April 8, 2015, http://www.cityofboston.gov/images_documents/PILOT_%20Task%20Force%20Final%20Report_WEB%20_tcm3 -21904.pdf. 83 Catsambas, Chiang, and Mocan, "The University of Pennsylvania and Payments in Lieu of Taxes.” 29 to make the claim that efforts to negotiate PILOTs inevitably change what should be a positive relationship between a city and its non-profits to one that is fraught with conflict. 84

BACKGROUND: The Econsult report focuses in particular on two examples of cities in which the relationship between a city and a non-profit became confrontational.85 In 2013, the city of

Pittsburgh, Pennsylvania sued its largest non-profit organization, the University of Pittsburgh

Medical Center (UPMC), challenging UPMC’s tax-exempt status.86 The litigation was later the source of deadlock in negotiations over PILOTs between the city and its non-profit community.87

In Scranton, Pennsylvania, a similar confrontation arose when the City of Scranton challenged the University of Scranton’s tax-exempt status.88 The Econsult report raises the fear that any effort to negotiate PILOTs in Philadelphia could similarly damage the relationships between the city and its nonprofits.89

Pittsburgh:

As the Econsult Solutions, Inc. report notes, in 2012, a consortium of non-profit groups called the Pittsburgh Public Service Fund (PPSF) agreed to contribute $2.6 Million a year over two years to the city of Pittsburgh.90 A total of around 41 donors were part of the fund, although neither their names, nor their specific pledges were revealed.91 Once the agreement ended in

84 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results,”accessed April 8, 2015. 85 Ibid. 86 Ibid. 87 Ibid. 88 Ibid. 89 Ibid. 90 Rick Cohen, "Consortium of Pittsburgh Nonprofits Offers Financial Aid to City," Nonprofit Quarterly, May 22, 2012, accessed April 8, 2015, https://nonprofitquarterly.org/author/2-uncategorised/20389-consortium-of-pittsburgh- nonprofits-offers-financial-aid-to-city.html. 91 Ibid. 30

2013, increased fiscal pressure led Pittsburgh’s mayor to seek new sources of revenue.92 The city administration chose to file a lawsuit challenging University of Pittsburgh Medical Center’s charitable tax status.93 In a press conference, then-mayor Luke Ravenstahl challenged UPMC to

“act like the charity it claims to be” and “engage in a serious conversation with the city and key stakeholders about its responsibilities to our community.”94 The lawsuit inhibited the ability of the city to broker any further agreement with UPMC or any other nonprofits with regards to

PILOTs.95 Instead, the city of Pittsburgh spent resources attempting to challenge UPMC’s nonprofits tax status.

In 2014, Pittsburgh’s newly elected mayor Bill Peduto dropped the lawsuit against

UPMC.96 His administration is seeking to secure a long-term financial contribution from

Pittsburgh’s largest nonprofits in the context of ongoing discussions that include UPMC,

Highmark, the University of Pittsburgh and Carnegie Mellon University.97 Peduto commented,

“The problem was … they had a gun to our head and we had a gun to theirs. ... So we decided, let’s have this conversation for the benefit of Pittsburgh. Let’s put away the guns.”98 In short, the current Pittsburgh administration is proving that it is possible to engage the city’s nonprofits in a discussion of PILOTs in a way that is neither antagonistic, nor focused only on financial

“transactions.” Instead they are discussing potential financial contributions from these eds and

92 Rick Cohen, “Pittsburgh Mayor: City Will Challenge Hospital's Tax-Exempt Status,” Nonprofit Quarterly, March 27, 2013, accessed April 8, 2015, https://nonprofitquarterly.org/policysocial-context/22024-pittsburgh-mayor-city- will-challenge-hospital-s-tax-exempt-status.html. 93 Ibid. 94 Ibid. 95 Ibid. 96 Bob Bauder, "Peduto Says City Dropped UPMC Lawsuit to Help Nonprofit Payment Talks," TribLIVE, July 29, 2014, accessed April 8, 2015, http://triblive.com/news/allegheny/6524239-74/upmc-nonprofits- peduto#axzz3SpGG1iSM. 97 Robert Zullo, "City Negotiating New Pact on Nonprofits' Contributions," Pittsburgh Post-Gazette, Sept 26, 2014, accessed April 8, 2015, http://www.post-gazette.com/local/city/2014/09/26/Mayor-says-nonprofit-negotiations- progressing/stories/201409260181. 98 Robert Zullo, "UPMC, City Drop Legal Fight over Taxes," Pittsburgh Post-Gazette, July 29, 2015, accessed April 8, 2015, http://www.post-gazette.com/local/city/2014/07/29/UPMC-city-drop-legal-fight-over- taxes/stories/201407290183. 31 meds in the context of ongoing conversations addressing the city’s very real needs, which include “the city’s pension fund, crumbling infrastructure, neglected parks and underserved neighborhoods.”99

Scranton:

As is further described in the Econsult Solutions, Inc. report, in September of 2012, the

University of Scranton sued the City of Scranton because the city had imposed a 15% parking tax.100 Because the university is a tax-exempt entity, representatives from the university believed that university property should be exempt from the tax.101 Scranton’s Business Administrator said the city would lose a “substantial amount” from the parking tax if the city were to lose the lawsuit.102 In retaliation against the resistance to paying the parking tax, Scranton’s city council threatened to oppose zoning variances sought out by nonprofit organizations.103 This action resulted in a newsletter from the Pennsylvania Association of Nonprofit Organizations to its 600

Pennsylvania members saying that the City of Scranton was “discriminat[ing] against nonprofits.”104 Over the last year, the city and its nonprofits decided to resolve their differences by negotiating PILOT payments of $300,000 dollars, a relatively small amount given the valuation of tax-exempt property in the Scranton at $11.5 million.105 According to Scranton’s mayor Bill Courtright, “Our plan is …to go to the nonprofits and ask them for help…whether it

99 Ibid. 100 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results," accessed April 8, 2015. 101 Ibid. 102 Jim Lockwood, "Nonprofit Organization Warily Eyeing Scranton's Feud with Tax-exempt Institutions," Scranton Times-Tribune, October 4, 2012, http://thetimes-tribune.com/news/nonprofit-organization-warily-eyeing-scranton- s-feud-with-tax-exempt-institutions-1.1382714. 103 Econsult Solutions, Inc., "The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results," accessed April 8, 2015. 104 Ibid 105 Borys Krawczeniuk, "Tax-exempt Burden Hangs Heavy on Region's Cities," Scranton Times-Tribune, June 22, 2014, accessed May 6, 2015, http://m.thetimes-tribune.com/news/tax-exempt-burden-hangs-heavy-on-region-s- cities-1.1707214. 32 be a donation or doing a project or buying a fire truck, something they could see a direct result from their money.”106

ANALYSIS: The Pittsburgh Public Service Fund represented some of the common limitations of poorly structured PILOTs. PILOTs can be secretive, contentious and thus an unreliable source of revenue, when short term and poorly planned. An agreement that does not reveal the names and specific contribution that each donor makes to the fund not only makes it difficult for any non- profit to be held accountable, but also to determine whether the methodology used to calculate their contribution is reliable.107 In addition, the voluntary nature of PILOTs can result in ineffective short-term deals.108 In the case of Pittsburgh, the short time frame for the initial PPSF and the increasingly hostile negotiations that followed meant that the city wasted time and resources challenging UPMC.

Additionally, both the cities of Pittsburgh and Scranton initially reacted to their financial difficulties by choosing pressure tactics in challenging wealthy nonprofits’ tax-exempt status.

The result was retaliation and impediments to progress for the cash-strapped cities and their nonprofit organizations. The argument that transactional approaches can result in confrontation between partners is a legitimate one. The Lincoln Institute of Land Policy documents that pressure tactics by a city’s government are not a preferable method in soliciting funds from non- profits.109 Despite these periods of significant tension, however, the terms of the debate in both

Pittsburgh and Scranton started to change; there is now significant hope in both cities that

106 Krawczeniuk, "Tax-exempt Burden Hangs Heavy on Region's Cities." 107 Adam H. Langley and Daphne A. Kenyon, Payments in Lieu of Taxes Balancing Municipal and Nonprofit Interests, Rep. Lincoln Institute of Land Policy, 2010, accessed April 8, 2015, https://www.lincolninst.edu/pubs/dl/1853_1174_PILOTs%20PFR%20final.pdf. 108 Ibid. 109 Ibid. 33

PILOTs can be negotiated on terms that will involve “mutually beneficial partnerships” in addressing issues of significant interest to the nonprofits as well as the cities involved. The

Econsult report cites only the conflict that erupted when the Pittsburgh and Scranton city governments resorted to pressure tactics with their city’s nonprofits. It fails to acknowledge that the terms of the debate changed in both these cities and now seems to have the potential to strengthen city/nonprofit relationships, while addressing the critical issue of these cities’ fiscal stability.

Additionally, the Econsult Solutions, Inc. report failed to analyze any cases in which cities have successfully negotiated PILOT agreements with their nonprofits. It is, therefore, worth looking further at additional examples of cases where cities and wealthy nonprofits have succeeded in addressing some of the critical social, economic, educational, environmental and fiscal problems they face together.

Worcester:

In Worcester, Massachusetts a 30-year impasse on PILOTs negotiations was resolved in

November of 2008, when the city reached its first PILOTs agreement with the Massachusetts

College of Pharmacy and Health Sciences (MCPHS).110 The contribution totals at $1.25 million spread over 25 years with the fund earmarked towards the Worcester Public Library.111 Since then, Worcester has engaged in several successful PILOT negotiations with its other non-profits.

In 2009, it was able to reach a PILOTs agreement with the Worcester Polytechnic Institute (WPI) for a payment total of $9.5 million to be spread over 25 years, also going towards the public

110Adam H. Langley and Daphne A. Kenyon, Payments in Lieu of Taxes By Nonprofits: Case Studies, Rep. Tax Analyst, 2011, accessed April 8, 2015. 111Walter Bird Jr., “How Worcester Loses Out on $20 Million in Property Taxes Annually," GoLocalWorcester, April 20, 2012, accessed April 22, 2015, http://www.golocalworcester.com/news/nonprofits-take-bite-out-of-tax- base-in-worcester. 34 library and Institution Park.112 In 2010, Clark University agreed to pay a total of $6.7 Million over 20 years, with the fund supporting the Worcester Public Library and Main South neighborhood enhancements.113

New Haven:

The city of New Haven has been involved in negotiating PILOT agreements for decades.

In the mid-1980s Yale became involved in New Haven’s attempt to enhance its service-sector employment.114 In 1991, the University reached a formal agreement to pay the city $1.2 Million a year in PILOTS based on the number of calls to fire services made by the university. Since then, Yale and the City of New Haven have continued to negotiate new mechanisms for calculating PILOT payments.115 In 2009, Yale’s PILOT payments amounted to $7.5 million per year, making it the largest PILOTS paid by a university in the United States.116 In 2014, Yale paid a total of $8.29 million in PILOTS, with $2.7 Million for the fire service and $5.6 million for the voluntary payments component.117 As opposed to the fears that PILOTs will inevitably become a transactional replacement for more mutually beneficial university/community partnerships, Yale also partnered with New Haven to launch the Economic Development

Corporation (EDC) in February 2008, a nonprofit organization devoted to attracting, developing and retaining businesses in New Haven.118 Under Yale University President’s Public Service

112 Bird Jr., “How Worcester Loses Out on $20 Million in Property Taxes Annually." 113 Ibid. 114 Yolanda Kodrzycki and Ana Patricia Muñoz, “Lessons from Resurgent Cities,” Rep. Federal Reserve Bank of Boston, 2009, accessed April 8, 2015, https://www.bostonfed.org/about/ar/ar2009/lessons-from-resurgent-cities.pdf. 115 Victor Zapana, "Yale to up Payment to City," Yale Daily News, February 27, 2009, accessed May 2, 2015, http://yaledailynews.com/blog/2009/02/27/yale-to-up-payment-to-city/. 116 Adam H. Langley and Daphne A. Kenyon, Payments in Lieu of Taxes Balancing Municipal and Nonprofit Interests, Rep. Lincoln Institute of Land Policy, 2010, accessed April 8, 2015, https://www.lincolninst.edu/pubs/dl/1853_1174_PILOTs%20PFR%20final.pdf. 117 Ed Stannard, "Yale’s Tax Exempt New Haven Property worth $2.5 Billion," New Haven Register, January 9, 2014, accessed May 2, 2015, http://www.nhregister.com/general-news/20140901/yales-tax-exempt-new-haven- property-worth-25-billion. 118 Kodrzycki and Muñoz, “Lessons from Resurgent Cities.” 35

Fellowship, students have an opportunity to work with the organization in a placement for the summer of 2015.119

In contrast to the picture painted by proponents of the Philadelphia Model, successful transactional relationships and fiscal negotiations between cities and their nonprofits take place in Worcester and New Haven as well as Boston in ways that frequently seem to strengthen, rather than undermine broader, mutually beneficial relationships on issues that range from economic development to parks to library services and fire safety. A significant factor in the resolutions of the impasse in Worcester was the adoption of “a respectful tone rather than resorting to pressure tactics.”120 Worcester’s city manager has underlined that “These agreements were based on a mutual understanding of our mutual benefits.” The agreements demonstrate an understanding that the success of the city depends on its nonprofits and vice versa.121 In

Worcester, the city benefitted from negotiating PILOTs that were earmarked towards specific purposes that aligned with the goals of the non-profits. Both municipalities and large nonprofits should look at the Yale-New Haven model if they are interested in implementing PILOTs as a means of strengthening cities’ public services and financial health.122 The Yale-New Haven model has shown that PILOTs can be integrated into a university’s goals for civic engagement.

PILOTs are never enough to be the sole solution for cash-strapped governments, but negotiated properly, they can provide a crucial source of reliable revenue that can alleviate some of the economic pressures on certain municipalities.123 Furthermore, contrary to the fear that

PILOTs will inevitably result in less mutually beneficial relationships between universities and

119 Yale University, “Yale University President’s Public Service Fellowship,” 2014, accessed May 6, 2015, http://www.yale.edu/ppsf/documents/EconomicDevelopmentCorporationofNewHaven_000.pdf. 120 Evelyn Brody, Mayra Marquez, and Katherine Toran, The Charitable Property-Tax Exemption and PILOTs, Rep. The Urban Institute, Aug. 2012, accessed April 8, 2015, http://www.urban.org/UploadedPDF/412640-The- Charitable-Property-Tax-Exemption-and-PILOTs.pdf. 121 Bird, “How Worcester Loses Out on $20 Million in Property Taxes Annually." 122 Langley and Kenyon, Payments in Lieu of Taxes Balancing Municipal and Nonprofit Interests. 123 Ibid. 36 their local communities, the Yale-New Haven model suggests that PILOTs can be negotiated in terms that strengthen these relationships.124 It is unjust for Penn to continue to argue that PILOTs and any kind of fiscal negotiations between cities and their nonprofits inevitably turn partners into adversaries, when there are clear cases of cities in which PILOTs are part of mutually collaborative relationships with their nonprofits.

In The Role of Universities in Advancing Citizenship and Social Justice in the 21st

Century, Dr. Harkavy writes that “The goal for universities, I believe, should be to contribute significantly to developing and sustaining democratic schools, communities and societies.”125

His premise suggests that it is in Penn’s best interest to align its goals with those of

Philadelphia’s when they concern the education system and the community that surrounds Penn.

Over the last thirty years many city governments have faced a combination of steep decline in federal aid and an erosion of the property tax base.126 In Philadelphia, it is no different. The initial PILOTs report presented a dire situation in which the School District of Philadelphia faced a $304 million budget shortfall in the 2013-2014 school year, and had to lay off almost 4,000 workers.127 Not much improvement has occurred since then, as the school district forecasts a deficit of around $80 Million for the upcoming 2015-2016 school year.128 Penn, like any other nonprofit, has the right to negotiate with the city about PILOT payments. Likewise, it is also a democratic right for the government to ask for aid in times of need, especially since by definition

124 Ibid. 125 Ira Harkavy, "The Role of Universities in Advancing Citizenship and Social Justice in the 21st Century." Education, Citizenship and Social Justice 1.1 (2006): 5-37, accessed April 8, 2015, http://soco- wasow.pbworks.com/f/harkavy06.pdf. 126 Adam H. Langley and Daphne A. Kenyon, The Property Tax Exemption for Nonprofits and Revenue Implications for Cities, The Lincoln Institute of Land Policy, November 2011, accessed April 8, 2015, http://www.taxpolicycenter.org/UploadedPDF/412460-Property-Tax-Exemption-Nonprofits.pdf. 127 Catsambas, Chiang, and Mocan, "The University of Pennsylvania and Payments in Lieu of Taxes.” 128 Kristen Graham, "Phila. School's Latest Budget Forecasts $80 Million Deficit," Philadelphia Inquirer, February 11, 2015, accessed April 22, 2015, http://articles.philly.com/2015-02-11/news/59010283_1_charter-schools- houstoun-district-run-schools.

37 non-profits earn their tax exempt status by serving as “public charities,” addressing problems within their communities, as well as the wider world. Seen in this light, PILOTs represent support for, rather than the commodification of, the university’s most basic values and commitments.

Conclusion: As students at an institution that is dedicated to upholding democratic values, we expect the University of Pennsylvania to provide compelling and concrete reasons for their refusal to participate in a PILOTs program to support the public school system of Philadelphia, especially at a time when the city’s schools are facing such a grave financial crisis. Penn’s arguments against PILOTs disappoint us. First, Penn as an institution cannot accurately claim that the fact that its employees pay wage taxes represents a contribution from Penn itself to the city. Even considering the significant contribution by these employees to the city, the wage tax is not a source of funding for the School District of Philadelphia, which is directly affected by Penn’s property tax exemption. Second, Penn Alexander clearly represents a great investment for Penn, its neighborhood and all the children who attend it, many of whom are the children of Penn faculty, students and staff. This success, however, underlines the need for more stable financial support for schools throughout the district, as opposed to representing a good argument against

PILOTs. Penn Alexander is a living embodiment of how much difference big non-profits can make in improving the city’s schools if they make a commitment to do so.

The success of Penn Alexander stands in sharp contrast to the rest of Penn’s neighborhood schools. The work of Penn’s Netter Center for Community Partnerships, for all its high ideals and good intentions, cannot be taken as a significant argument against PILOTs. There 38 is evidence from the surveys of Penn undergraduates who have taken the academically based community service courses that the Netter Center supports, that these students have benefitted from this experience. There is also some evidence that individual children have benefitted from participating in Netter Center sponsored programs. There is, however, little or no hard evidence

(of the sort that is so readily abundant at Penn Alexander) that the Netter Center’s school partners and the children who attend them have benefitted from their “university assisted community school” status. These schools have not shown the improvements in their test scores, attendance, and graduation rates that scholars look for in seeking evidence of successful approaches to improving public education, or that parents look for in choosing schools for their children. Over the two years that the School Reform Commission closed 31 schools (a staggering number, but still less than 10% of the District’s total), three of those schools (Drew, Wilson, and

University City High School) were among the seven with which Netter has partnered most closely. The fact that all the Netter Center’s efforts were unable to make the kind of difference in these schools that would have led the SRC to keep them open makes it clear that good-willed programming, supported primarily with undergraduates and grant writing, is simply not the path towards developing stable, successful neighborhood schools, much less the type of transformative, democratic community partnerships that the Netter Center seeks to achieve.

Finally, it seems willfully blind for Penn and the higher ed partners who co-sponsored the

Econsult Report, to claim that “the Philadelphia Model” (of not paying PILOTs) represents the only means towards achieving mutually beneficial relationships between desperately under- financed municipalities and school districts and their wealthy non-profit “eds and meds.” As the extensive research of the Cambridge Land Institute on different PILOTS arrangements demonstrates, there are certainly a few cases where antagonistic relationships that served neither 39 cities nor their nonprofits well have developed in fights over PILOTS. There are also, however, a significant number of cities and towns that have worked out PILOTS arrangements in the context of stable, mutually beneficial relationships. The example of Yale-New Haven demonstrates especially well that a commitment to PILOTs can result in peaceful collaboration rather than adversarial conflict.

Clearly a commitment to PILOTS, as a financial transaction, is nowhere near what is needed to address the catastrophic budget cuts that the Philadelphia school district has endured over the last two years, or the high rates of childhood poverty and low performance of its schools that the Philadelphia School District has faced for so many decades. Nonetheless, this exploration of the University's arguments against PILOTs suggests that, instead of putting resources into arguing against PILOTs, the University should develop a relationship with the

School District of Philadelphia based on mutual commitments to improving the basic infrastructure of the city’s schools (including their finances) and furthering this university’s commitment to excellence and civic engagement with its own community and the wider world.

PILOTs may or may not be part of that much-needed agenda; but simply maintaining that enough is being done now is not. 40

Bibliography

Bauder, Bob. "Peduto Says City Dropped UPMC Lawsuit to Help Nonprofit Payment Talks." TribLIVE, July 29, 2014. Accessed April 8, 2015. http://triblive.com/news/allegheny/6524239-74/upmc- nonprofits-peduto#axzz3SpGG1iSM.

Barrientos, Tanya. "How Much Retail Is Actually Owned by Penn?" Penn Current. University of Pennsylvania, December 13, 2012, accessed April 8, 2015. http://www.upenn.edu/pennnews/current/2012-12-13/ask-benny/how-much-retail-actually- owned-penn.

Bird, Walter, Jr. " How Worcester Loses Out on $20 Million in Property Taxes Annually." GoLocalWorcester, 20 Apr. 2012. Accessed 22 Apr. 2015. http://www.golocalworcester.com/news/nonprofits-take-bite-out-of-tax-base-in-worcester.

Brody, Evelyn, Marquez, Mayra and Toran, Katherine. The Charitable Property-Tax Exemption and PILOTs. Rep. The Urban Institute, August 2012. Accessed April 8, 2015. http://www.urban.org/UploadedPDF/412640-The-Charitable-Property-Tax-Exemption-and- PILOTs.pdf.

Bunch,Will. “Eds, Meds, Taxes Fuel Protest.” Philly Daily News, January 21, 2015. Accessed May 2015. http://articles.philly.com/2013-09-27/news/42430184_1_penn-alexander-nonprofits-property- taxes.

Cahn, Jack. "Penn's Wage Tax Contributions Fly past PILOT Controversy." The Daily Pennsylvanian, February 19, 2015. Accessed April 8, 2015. http://www.thedp.com/article/2015/02/penn-contributes-106-million-to-philadelphia-in-total-tax- revenue.

Catsambas, Marietta, Chiang, Debby and Mocan, Leyla. "The University of Pennsylvania and Payments in Lieu of Taxes." Journal of Politics & Society (2015): n. pag. Helvidius Group. Accessed 08 Apr. 2015. http://www.helvidius.org/2015/04/12/the-university-of-pennsylvania-and-payments- in-lieu-of-taxes/.

Cohen, Claire. “Four Reasons Why Penn Alexander is Important.” The Daily Pennsylvanian, February 27, 2014. Accessed April 2, 2015. http://www.thedp.com/article/2014/02/four-things-penn-alexander.

Cohen, Rick. "Consortium of Pittsburgh Nonprofits Offers Financial Aid to City." Nonprofit Quarterly, 22 May 2012. Accessed April 8, 2015. https://nonprofitquarterly.org/author/2- uncategorised/20389-consortium-of-pittsburgh-nonprofits-offers-financial-aid-to-city.html.

Cohen, Rick. “Pittsburgh Mayor: City Will Challenge Hospital's Tax-Exempt Status.” Nonprofit Quarterly, March 27, 2013. Accessed April 8, 2015. https://nonprofitquarterly.org/policysocial- context/22024-pittsburgh-mayor-city-will-challenge-hospital-s-tax-exempt-status.html.

Cucchiara, Maia. “New Goals, Familiar Challenges?: A Brief History of University-Run Schools.” Perspectives on Urban Education (Summer 2010): 96-108.

Denvir, Daniel. "How Big Business Helps Starve Philly Schools." Philadelphia Citypaper, June 26, 2013. Accessed April 8, 2015. http://citypaper.net/how-big-business-helps-starve-philly-schools/. 41

Dubow, Rob, and Arevalo, Josefine. Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2014. Rep. City of Philadelphia, 30 June 2014. Accessed April 2015. www.phila.gov/investor/pdfs/2014CAFR.pdf.

Econsult Solutions, Inc. “The City of Philadelphia and its Higher Eds: Shared Goals, Shared Missions, Shared Results.” Report submitted to The Philadelphia Higher Education Government Relations Officers Group, Philadelphia, Pennsylvania, September 18, 2013. http://www.econsultsolutions.com/report/35740/.

Fund Philly Schools. “The Facts.” Accessed April 24, 2015. http://www.fundphillyschools.org/the-facts.

Graham, Kristen. “Phila. District Spends Less Per Pupil Than Most Other Cities.” Philadelphia Inquirer, Jan. 17, 2015. Accessed May 2015. http://articles.philly.com/2015-01- 17/news/58153804_1_palmer-leadership-learning-philadelphia-school-district-formula.

Graham, Kristen. "Phila. School's Latest Budget Forecasts $80 Million Deficit." Philadelphia Inquirer, February 11, 2015. Accessed May 5, 2015. http://articles.philly.com/2015-02- 11/news/59010283_1_charter-schools-houstoun-district-run-schools.

Green, Bill. “Investing in Philadelphia’s Future: The Case for Comprehensive Education Reform.” Paper presented to Philadelphia City Council, Philadelphia, Pennsylvania, May 2010.

Harkavy, Ira. "The Role of Universities in Advancing Citizenship and Social Justice in the 21st Century." Education, Citizenship and Social Justice 1.1 (2006): 5-37. Web. 8 Apr. 2015. http://soco- wasow.pbworks.com/f/harkavy06.pdf.

Harkavy, Ira, Hartley, Matthew, Hodges, Rita, and Weeks, Joann. “The Promise of University-Assisted Community Schools to Transform American Schooling: A Report from the Field, 1985- 2012.” Peabody Journal of Education 88:5 (2013): 525-540. doi:10.1080/0161956X.2013.834789. https://www.nettercenter.upenn.edu/sites/netter_internal/files/Harkavy_Hartley_Hodges_Weeks_ Peabody_Journal.pdf.

Kodrzycki, Yolanda, and Ana Patricia Muñoz. Lessons from Resurgent Cities. Rep. Federal Reserve Bank of Boston, 2009. Web. 08 Apr. 2015. https://www.bostonfed.org/about/ar/ar2009/lessons- from-resurgent-cities.pdf.

Krawczeniuk, Borys. "Tax-exempt Burden Hangs Heavy on Region's Cities." Scranton Times-Tribune, June 22, 2014. Accessed May 6, 2015. http://m.thetimes-tribune.com/news/tax-exempt-burden- hangs-heavy-on-region-s-cities-1.1707214.

Kromer, John and Kerman, Lucy. “West Philadelphia Initiatives: A Case Study in Urban Revitalization.” 2004: http://www.fels.upenn.edu/news/new-report-urban-revitalization-1.

Kumar, Prameet. "Exploring Penn's financial contribution to the city." The Daily Pennsylvanian (Philadelphia, PA), March 27, 2012.

42

Langley, Adam H., and Kenyon, Daphne A. Payments in Lieu of Taxes Balancing Municipal and Nonprofit Interests. Rep. Lincoln Institute of Land Policy, 2010. Accessed April 8, 2015. https://www.lincolninst.edu/pubs/dl/1853_1174_PILOTs%20PFR%20final.pdf.

Langley, Adam H., and Kenyon, Daphne A. Payments in Lieu of Taxes By Nonprofits: Case Studies. Rep. Tax Analyst, 2011. Web. 8 Apr. 2015.

Langley, Adam H., and Daphne A. Kenyon. The Property Tax Exemption for Nonprofits and Revenue Implications for Cities. Rep. The Lincoln Institute of Land Policy, Nov. 2011. Accessed April 8, 2015. http://www.taxpolicycenter.org/UploadedPDF/412460-Property-Tax-Exemption- Nonprofits.pdf.

Langley, Adam H., Kenyon, Daphne A., and Bailin, Patricia C. Payments in Lieu of Taxes by Nonprofits: Which Nonprofits Make PILOTs and Which Localities Receive Them. Rep. Lincoln Institute of Land Policy, 2012. Accessed April 8, 2015. https://www.lincolninst.edu/pubs/dl/2143_1469_Langley_WP12AL1.pdf.

Learning First Alliance. “Designing an Exemplar: University of Pennsylvania and the Penn Alexander School.” February 25, 2014. http://www.learningfirst.org/designing-exemplar-university- pennsylvania-and-penn-alexander-school.

Legere, Laura. "Why Do Cities Solicit PILOTs and Why Do Nonprofits Dislike the Idea?" Keystone Crossroads, January 12, 2015. Accessed April 7, 2015. http://crossroads.newsworks.org/index.php/local/keystone-crossroads/77173-why-do-cities- solicit-pilots-and-why-do-nonprofits-dislike-the-idea.

Lockwood, Jim. "Nonprofit Organization Warily Eyeing Scranton's Feud with Tax-exempt Institutions." Scranton Times-Tribune, October 4, 2012. Accessed April 8, 2015. http://thetimes- tribune.com/news/nonprofit-organization-warily-eyeing-scranton-s-feud-with-tax-exempt- institutions-1.1382714.

Lombardo, Clare. “Taking Attendance: Examining Penn’s Role in West Philly Schools.” 34th Street Magazine, October 16, 2014. Accessed April 22, 2015. http://www.34st.com/article/2014/10/taking-attendance-public-schools.

Marble, Will. “Penn to extend its programming at Henry C. Lea School.” The Daily Pennsylvanian, July 2, 2013. Accessed April 22, 2015. http://www.thedp.com/article/2013/07/more-aid-to-lea- elementary.

Matheson, Kathy. “4 Philadelphia Schools Saved, 23 Closing After SRC Vote.” ABC Action News, March 7, 2013. http://6abc.com/archive/9018966/.

Mathis, Joel. “How Did Candidate’s Kids Get Into Penn Alexander?” Philadelphia Daily News, January 27, 2014. Accessed April 9, 2015. http://www.phillymag.com/news/2014/01/27/candidates-kids- get-penn-alexander/.

Mayor's PILOT Task Force. Mayor’s PILOT Task Force: Final Report & Recommendations, 17 Dec. 2010. Accessed April 8, 2015. http://www.cityofboston.gov/images_documents/PILOT_%20Task%20Force%20Final%20Repor t_WEB%20_tcm3-21904.pdf.

43

Mezzacappa, Dale. “Admission to coveted Penn Alexander now by lottery.” The Philadelphia Public School Notebook, January18, 2013. Accessed April 12, 2015. http://thenotebook.org/blog/135527/admission-penn-alexander-now-by-lottery.

Mezzacappa, Dale. “Philadelphia’s NAEP Scores are Below Average for Big-city Districts.” The Philadelphia Public School Notebook, December 18, 2013. http://thenotebook.org/blog/136758/philadelphia-naep-scores-lag-behind-other-urban- districts.

The Netter Center for Community Partnerships. “Course History.” Accessed April 24, 2015. https://www.nettercenter.upenn.edu/abcs-courses-course-history.

The Netter Center for Community Partnerships. “Financial Report,” in Annual Report 2010-2012 Netter Center for Community Partnerships. Accessed April 24, 2015. https://www.nettercenter.upenn.edu/publications-resources/annual-reports.

The Netter Center for Community Partnerships. “University-Assisted Community Schools.” Accessed May 5, 2015. https://www.nettercenter.upenn.edu/programs/university-assisted-community- schools.

Otterbein, Holly. "Nonprofits Flagged by IRS Still Get Property-tax Pass in Philly." Newsworks WHYY, January 9, 2013. Accessed April 7, 2015. http://www.newsworks.org/index.php/local/the- latest/49253-philadelphia-gives-flagged-nonprofits-a-pass-on-property-taxes.

Otterbein, Holly. “Tom Wolf’s Incredible Plan to Overhaul Philly Taxes.” Citified, March 4, 2015. Accessed May 7, 2015. http://www.phillymag.com/citified/2015/03/04/tom-wolf-philadelphia-tax-plan/.

Payne, Charles. So Much Reform, So Little Change: The Persistence of Failure in Urban Schools. Cambridge: Harvard Education Press, 2008.

"Penn Facts." University of Pennsylvania. The Trustees of the University of Pennsylvania. Accessed April 8, 2015. http://www.upenn.edu/about/facts.

Perez, Yolanda, Vrabel, Jim, and Avault, John. “Tax Exempt Property in Boston: Analysis of Types, Uses, and Issues.” Boston Redevelopment Authority, Dec. 2002. Accessed May 3, 2015. http://www.bostonredevelopmentauthority.org/getattachment/e4373a7a-6330-401f-96b4- 3de1293ea88a/.

Petkun, Lisa. “What is a Purely Public Charity in Pennsylvania?” Law Firm of Pepper Hamilton. December 9, 2001. Accessed May 2015. www.pepperlaw.com/publications/what-is-a-purely- public-charity-in-pennsylvania-2001-12-09/.

Philadelphia Coalition Advocating for Public Schools, “Short-Changing Philadelphia Students: How the 10- Year Tax Abatement Underwrites Luxury Developments And Starves Schools,” Oct. 2013. Accessed April 2015. https://wearepcaps.files.wordpress.com/2013/10/pcaps-paper-abatementsfinal.pdf.

The Philadelphia Public School Notebook. “School-by-School graduation rates.” Last modified February 3, 2012. Accessed April 2015. http://thenotebook.org/february-2012/124484/school-school- graduation-rates.

44

Russ, Hillary. “Philadelphia Teachers to Pay for Health Benefits as Contract Axed.” The New York Times, October 6, 2014. Accessed April 24, 2015. http://www.nytimes.com/reuters/2014/10/06/us/06reuters-pennsylvania-philadelphia- education.html.

Rich, Motoko. “Philadelphia Teachers Hit by Latest Cuts.” The New York Times, October 14, 2014. Accessed April 24, 205. http://www.nytimes.com/2014/10/15/us/philadelphia-teachers-hit-by- latest-cuts.html.

Rich, Motoko and Hurdle, Jon. “Philadelphia Schools to Open on Time Amid Millions in Budget Cuts.” The New York Times, August 15, 2014. Accessed April 24, 2015. http://www.nytimes.com/2014/08/16/us/philadelphia-schools-to-open-on-time-amid-millions-in- budget-cuts.html

Rodin, Judith. “Investing in Public Education.” In The University & Urban Revival, edited by Eugenie L. Birch and Susan M. Wachter, 139-166. Philadelphia: University of Pennsylvania Press, 2007.

The School District of Philadelphia. “School Profile: B. B. Comegys School.” Accessed May 5, 2015. https://webapps.philasd.org/school_profile/view/1260.

The School District of Philadelphia. “School Profile: Henry C. Lea School.” Accessed May 5, 2015. https://.webapps.philasd.org/school_profile/view/1340.

The School District of Philadelphia. “School Profile: Samuel B. Huey School.” Accessed May 5, 2015. https://webapps.philasd.org/school_profile/view/1330.

The School District of Philadelphia. “SY 2013-2014 School Progress Report.” Accessed May 6, 2015. http://webgui.phila.k12.pa.us/offices/s/strategic-analytics/annual-reports/school-progress- reports/sy2013-2014-reports.

Socolar, Paul. “2013 On-time Graduation Rates for District and Renaissance High Schools.” Last modified January 28, 2014. http://thenotebook.org/blog/146857/on-time-graduation-rates-2013- philadelphia-high-schools.

Select Greater Philadelphia. “Leading Employers,” August 13, 2014. Accessed April 7, 2015. http://www.selectgreaterphiladelphia.com/industries/leading-employers/.

Snyder, Susan. “A Debate on Raising Funds From City’s Universities and Nonprofits.” Philadelphia Inquirer, September 27, 2013. Accessed April 2013. http://articles.philly.com/2013-09- 27/news/42430184_1_penn-alexander-nonprofits-property-taxes.

Stannard, Ed. "Yale’s Tax Exempt New Haven Property worth $2.5 Billion." New Haven Register, January 9, 2014. Accessed May 2, 2015. http://www.nhregister.com/general- news/20140901/yales-tax-exempt-new-haven-property-worth-25-billion.

Steif, Ken. “Can the success of Penn Alexander be replicated?” The Philadelphia Public School Notebook, April 8, 2013. Accessed April 2, 2015. http://thenotebook.org/blog/135769/school-improvement- districts-can-success-penn-alexander-school-be-replicated.

45

Superville, Denisa R. “School Budget Problems Have Deep Roots in Philadelphia.” Education Week, May 6, 2014. Accessed April 2015. http://www.edweek.org/ew/articles/2014/05/07/30philly.h33.html.

Wink, Christopher. “Philly’s city wage tax just turned 75. Here’s its dubious legacy.” Technically Philly, December 12, 2014. Accessed May 7, 2015. http://technical.ly/philly/2014/12/12/philadelphia- city-wage-tax/.

Wright, Jennifer. “Protesters take over Gutmann’s holiday party.” The Daily Pennsylvanian, December 9, 2014. Accessed April 2, 2015. http://www.thedp.com/article/2014/12/protesters-take-over- gutmanns-holiday-party.

Yale University. Yale University President’s Public Service Fellowship. 2014. Accessed May 6, 2015. http://www.yale.edu/ppsf/documents/EconomicDevelopmentCorporationofNewHaven_000.pdf.

Zapana, Victor. "Yale to Up Payment to City." Yale Daily News, February 27, 2009. Accessed May 2, 2015. http://yaledailynews.com/blog/2009/02/27/yale-to-up-payment-to-city/.

Zullo, Robert. "City Negotiating New Pact on Nonprofits' Contributions." Pittsburgh Post-Gazette, September 26, 2014. Accessed April 8, 2015. http://www.post- gazette.com/local/city/2014/09/26/Mayor-says-nonprofit-negotiations- progressing/stories/201409260181.

Zullo, Robert. "UPMC, City Drop Legal Fight over Taxes." Pittsburgh Post-Gazette. Pittsburgh Post- Gazette, July 29, 2015. Accessed April 8, 2015. http://www.post- gazette.com/local/city/2014/07/29/UPMC-city-drop-legal-fight-over-taxes/stories/201407290183.