City learning important lesson in fiscal dilemma
Perhaps the saying “Ask and you shall receive” will be helpful in the city’s efforts to avoid a financial crisis.
The letter Mayor Maggie Stock sent about two weeks ago to the community’s nonprofit agencies, while not having evoked a quick or substantial initial response, is perhaps establishing the foundation for a source of additional funds that the city has up until now been unable to access.
According to an article in Friday’s Butler Eagle, three responses had been received and at least some of those responses included checks.
The city probably wouldn’t have received those checks if the request for help hadn’t been made.
The latest responses add to what the city has been receiving from five entities that have made such donations in the past — entities that have requested anonymity due to the sensitivity of the issue.
The mayor said she was seeking permission from the three newest contributors, but it would not be a surprise if they too chose not to have their identities publicized.
Nonprofit agencies, which include schools, churches, social service agencies and governmental entities, are not required to pay property taxes. Some contributors to those agencies might not agree with doling out money unnecessarily to the city despite the services that the city provides to the agencies — such as police and fire protection, as well as winter street maintenance.
Stock said the city also receives a payment in lieu of taxes from the Butler County Housing Authority, which shares the same benefits from the city that the other agencies enjoy.
For Butler, as well as most other cities in Pennsylvania, non-taxable properties represent a major loss of potential tax revenue. For Butler, those non-taxable properties constitute 35 percent of the city’s 2.7 square miles.
That figure helps explain why the city is in dire financial straits, to the point that it could be bankrupt in three years, if the current drain on surplus funds continues unchecked.
Stock acknowledged that nonprofit agencies’ budgets, like the city’s, are tight amid the current economic circumstances. But she said agencies nonetheless were being asked to find a place in their 2011 budgets to help the city avert a situation that could negatively affect them in just a few years, if the city doesn’t right its fiscal ship.
If the city merits any criticism in regard to its request, it is that such a request has not been a long-standing, annual action. However, the city’s impending financial crisis was not emphasized by city officials, who seemed content to hope for some miracle from Harrisburg or Washington, D.C. — a miracle that seems nearly impossible.
The city had nothing to lose by writing to the nonprofit groups. The responses received to date, as well as the previous contributors, acknowledge a conscience within those agencies that they need to be more than just a presence in Butler.
The city isn’t going to resolve its financial dilemma with this effort, even if all nonprofits came forward and contributed. But any contributions will be a start toward bettering the city’s financial picture.
A more effective solution to the impact of non-taxable properties will have to come from Harrisburg. But, in the meantime, Stock is learning that asking tax-exempt organizations for help — and to contribute toward city services in lieu of taxes — can produce results.