At least that's the opinion of president and CEO C.T. O'Donnell.

The nonprofit is exempt from property taxes but makes an annual $2,500 payment in lieu of taxes.

And it offers another $2,500 in health education services for city government employees.

Those contributions, coupled with the center's education and prevention work in the York area, make for a "huge amount of really outstanding services provided for this community," O'Donnell said.

But in a state that forces local governments to lean on real estate taxes to provide basic services, tax-exemption has become an increasingly vexing issue for leaders of urban communities, including York and surrounding cities.

If York Mayor Kim Bracey's pleas for financial reform one day resonate with the state Legislature, the Byrnes center and other tax-exempt entities could find themselves paying the city substantially more than they contribute now -- if they contribute anything at all.

The problem: Pennsylvania's cities suffer from a "warehousing of tax-exempt real estate," Bracey said while testifying in January before state legislators.

York has $1.6 billion in assessed property value, but the city collects taxes on only about $996 million.

The remaining $604 million -- nearly 38 percent of the city's tax base -- is held by a variety of tax-exempt entities, including churches, charities, public education facilities, utilities and several branches of government.

The high concentration of tax-exempt real estate, most of which serves city and non-city residents, accounts for more than half of city property owners' tax bills, Bracey said.

"The practical result is that the real estate taxpayers of the city subsidize every non-city resident who uses county government services, medical facilities (and) religious, higher education, or social service facilities," Bracey told the committee.

Some of those entities make optional payments in lieu of taxes -- their contributions total between $600,000 and $700,000 annually -- but Bracey has suggested making the payments mandatory.

Under her proposal, organizations would pay municipal and school taxes "in proportion to the non-local population they serve," or they could pay one-third of what they would owe if they were taxable.

That means, for example, that York County government would pay the city at least one-third of the money it would owe if its buildings were taxable.

Spike: The tax-exempt proportion of York's tax base has grown over the past seven years, according to county assessment data.

About 27 percent of the city's real estate value was untaxable from 2003 to 2005.

But after the most recent countywide reassessment, that figure jumped to roughly 36 percent.

As of November 2009, it stood at almost 38 percent.

The spike likely can be traced back to assessment techniques used on some of York's larger tax-exempt entities, city business administrator Michael O'Rourke said.

"Part of the difficulty is that when real estate is tax exempt, there is no incentive on the part of the real estate owners to file assessment appeals, or to even pay attention to what (their properties are) assessed at," he said.

And many of the physically biggest tax-exempt properties in the city -- county government buildings, schools and other large public facilities -- cannot be easily assessed using a traditional comparable sales approach. Alternative techniques generally result in higher assessments, O'Rourke said.

More and more: The city's share of York County's tax-exempt property also has grown.

Before 2006, the city contained about 16 percent of all untaxable property value countywide. Since the reassessment, that number has hovered near 24 percent.

For the city to collect payments under Bracey's one-third proposal, the state would have to make a change in Pennsylvania's County Assessment Law, O'Rourke said.

If the change became policy, York stands to gain millions of dollars annually, or about $3.1 million in 2010, he said. If all tax-exempt real estate were fully taxed, it would bring the city about $9.2 million.

That compares to the $7 million revenue gap that city officials started with last year when preparing York's 2010 budget -- a process that eventually resulted in the elimination of several vacant positions, including six police and two firefighting jobs.

Services affected? A handful of city nonprofits said mandatory payments would create a significant hardship.

"I'd really have to look at the nonprofit laws and rationale for having nonprofit status at all," said O'Donnell of the Byrnes center.

At the York Rescue Mission, the Rev. Paul Gorog said the payments could cut into the organization's services.

"We're taking hundreds of people off the street every year. We're putting them into a program where they otherwise could be causing all this trouble and damage," said Gorog, the mission's executive director. "Maybe we (would have) to do less feeding of meals. You're just taking away help to the people in the city who could be a big problem, but they're not because they're with us.

"We're aware ... that there are needs," Gorog said. "We want to do our part as we can, but I guess we feel that we're already doing our part with the taxes that we do pay."

Stretched: The York YWCA has made partial payments on its East Market Street facility when its budget has allowed as much, said Deb Stock, president and CEO.

"We recognize the fact that we do receive ... services from the city, and we certainly make an attempt to help to pay for them," she said. "I think our attitude is that we're all in this together, and the sooner we realize that, the sooner we're going to have a better city."

With nonprofits' pocketbooks pinched by the economy, the YWCA won't be able to make any payments this year. But the organization continues to help York in other ways, such as the ongoing Community Renaissance project in the city's Olde Towne East neighborhood, Stock said.

"I think that nonprofits are helping to bring more money to the table in terms of services that are being provided to the city," she said. "I completely understand where the mayor's coming from. I just don't think (payments in lieu of taxes) should be mandatory."

Giving back: The Logos Academy must pay full taxes on its school currently under construction at 256 W. King St. because the property isn't yet occupied, head of school Traci Foster said.

But once the new facility is up and running, Logos plans to continue paying full real estate taxes -- about $17,000 a year -- based on the former assessment of First Capital Fibers, which used to occupy the site.

"Although (Logos) is a school, we educate our students to an end, and that end is to take their gifts and give back to the community," Foster said. "We want the city to flourish, and this is our commitment to that."

But she stopped short of endorsing mandatory payments for tax-exempt entities citywide.

If that were to happen, Logos might consider lowering its contribution to the required one-third, Foster said.

-- Reach Peter Mergenthaler at 505-5439 or pmergenthaler@yorkdispatch.com, or follow him on Twitter at @ydcity.