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Butler must step up efforts for payments in lieu of taxes

Act 47, Pennsylvania’s financially distressed cities law, has been rejected up to now by Butler city officials, despite the city’s worsening money situation and the possibility of bankruptcy in two or three years, once reserve funds are used up.

Harrisburg, Pennsylvania’s capital city, is now living under Act 47.

Butler already has asked non-taxable entities such as Butler Memorial Hospital, churches and nonprofit agencies for contributions in lieu of taxes. Some of those contacted have come forward with a contribution; most have ignored the request.

Harrisburg officials are preparing to beef up efforts on that front, with the city having collected just $410,000 in PILOT (payments in lieu of taxes) money last year. According to a front-page article in Tuesday’s Harrisburg Patriot-News, if the city’s Act 47 financial recovery plan is approved, those now tax-exempt will be receiving a phone call saying, “Pay us something. Anything. Please.”

The Harrisburg newspaper article went on to say, “To keep the city out of bankruptcy court, the Act 47 team said Harrisburg needs more than prestige from the civic and cultural institutions that own almost half its real estate.”

So does Butler need something from those who help make this city a great place to live and work, but who are not obligated to pay taxes.

The $1.2 million in taxes that Butler’s non-taxable land (29 percent of the city) would owe if those properties were being taxed is a small amount when stacked against the $12 million a year that Harrisburg’s land-owning nonprofits would owe. However, an additional $1.2 million each year would go a long way toward erasing Butler’s money headaches and help the city do more in regard to fixing deteriorated infrastructure.

While any thought of collecting $1.2 million in PILOT money is unrealistic, collecting a percentage of that for Butler’s well-being is important and ought to remain a matter of discussion and concerted effort.

Because of how quiet Butler officials routinely are about the issue, it’s unclear how much they are doing in terms of regularly reminding non-taxable entities about the financial crisis.

PILOT ought to be a topic at every city council meeting, but now is seldom mentioned.

An issue in Harrisburg revolves around the state government’s contribution to the city. The state has paid Harrisburg approximately $1 million a year, primarily for fire protection, but, according to the Patriot-News, that was halved under the state’s 2011-12 budget.

The newpaper reported that some legislators have proposed new revenue streams for Harrisburg and other cities housing state and county buildings, but said no one has been rushing to vote for them.

No doubt there are Butler residents who feel the county government ought to be making a PILOT to the city because of the presence of the courthouse, government center and prison. The new board of county commissioners that will take office in January should weigh that possibility.

Indeed, the four commissioner candidates who will be on the Nov. 8 general election ballot ought to be asked their position on the issue when campaigning this fall.

The Patriot-News reported that Dauphin County will continue to contribute $10,000 to Harrisburg’s Downtown Improvement District “but don’t expect Dauphin County, which would contribute to the city in other ways under the (Act 47) plan, to volunteer a larger percentage of its theoretical $1.1 million tax bill.”

With Butler staring at the possibility of Act 47, despite the rejections to date, Butler County government must ponder the impact it might feel if the city eventually has no choice but to succumb to distressed status.

Helping the city now might help avoid a more unpalatable impact later.

“Time to pass the hat” was the headline over Tuesday’s Patriot-News story. A variation of that message — “Time to pass the hat again” — is appropriate for Butler.

As with Harrisburg, Butler’s financial plight isn’t going to evaporate with good intentions not aggressively pursued.

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