Pitt to contribute to Public Service Fund

A collaboration of 45 nonprofit groups, including Pitt, has pledged to commit a total of $5.2… A collaboration of 45 nonprofit groups, including Pitt, has pledged to commit a total of $5.2 million to Pittsburgh over the next two years, enough to aid but not entirely balance the city’s budget.

Neither Pitt nor CMU would reveal exactly how much of the $5.2 million in Public Service Fund donations they will contribute to aid the city.

Mayor Luke Ravenstahl has repeatedly said that the next few years will be critical to Pittsburgh’s financial stability, and this Public Service Fund is one of many ideas to raise money to balance the city budget and keep Pittsburgh fiscally sound.

The fund also includes Carnegie Mellon University and Highmark Health Care. These nonprofits. along with Pitt, pledged to help Ravenstahl come up with solutions to ease the city’s financial woes because his “fair share” tax proposal was rejected last year.

The tuition tax would have raised money to balance a $15 million hole in the city budget by adding an additional 1 percent tax to college students in the Pittsburgh community.

Unlike the tuition tax, the PSF does not require extra direct contributions from students. It relies solely on donations from nonprofits that are willing to contribute to the city.

“All the contributions from the nonprofits are voluntary and will go to the city’s General Operating Budget,” said Reynolds Clark, co-chair of the PSF and a Pitt vice chancellor for community initiatives.

According to Kenneth Service, executive director of the Pittsburgh Council on Higher Education, which is comprised of the 10 accredited universities and colleges in the Pittsburgh Area, there is a $15 million plug in this year’s budget that says “Public Service Fund.”

But the PSF has only pledged $2.6 million for 2010 and $2.6 million for 2011, so it is clear that the PSF will not balance the entire budget.

Dan Gilman, chief of staff for Councilman Bill Peduto said, “We have a number of dollars that we can move around to close gaps … But you can only do that for so long before eventually there’s a long-term problem to address. If we don’t find a solution, there will be no dollars to shift around and we will be in a financial crisis.”

Ravenstahl was not available for comment on these issues.

Clark did say that Pitt gave significantly larger contributions to the new PSF than it had provided to the PSF that existed between 2005-07 and that Pitt, CMU and Highmark would be “major contributors.”

The original Public Service Fund included more than 100 nonprofits. Clark said only 45 of these 100 nonprofits in the current budget are making contributions to the city budget, partly because the funds are voluntary and partly because the budgets of nonprofits are now constrained because of the economy.

“These nonprofits have less discretionary dollars to donate,” Clark said. “These are precious dollars, you have to understand. The nonprofits are doing this as an expression of cooperation to the city because they understand the importance of Pittsburgh being a fiscally sound city.”

It is unclear whether or not Ravenstahl will ask for more donations or help from the PSF in the future.

Clark said, “It is not reasonable to expect any increase in donations toward the PSF for 2010-11 from these nonprofits.”

Service said that many of the nonprofits feel that they already make significant, non-monetary contributions to the city.

“A predominant feeling among the member institutions is that the universities make a lot of contributions to the city in ways above and beyond education advantages,” Service said. “They provide economic advantages and community services such as Pitt police protection that would have to be paid for by the city.”

But Clark emphasized that Pitt will work with the city if asked for further help and referred to the nonprofits and institutions in the community as in a “cooperative team” with the mayor. “We think it is important that Pittsburgh is a fiscally sound city because the city is our campus,” Clark said.

Clark said the PSF sent a legal document to the city that discusses the exact monetary contributions. The document is being reviewed by the law department, and then must be signed by the mayor and sent to council for ratification.

The document must be ratified by City Council before the $2.6 million in 2010 funds can actually be donated, but Clark is “certain” that this ratification will happen before the end of the year.

“By law, City Council is required to pass a balanced budget by the end of the year,” Gilman said.