York City officials are on the brink of unleashing an unprecedented fundraising campaign that aims to steady the city's burdensome tax rate by encouraging more property owners to carry part of the load.
A team of city "stakeholders" are poised to begin sending letters, making phone calls and paying visits to the owners of more than $400 million worth of city property -- none of which is taxed.
Their strategy is simple: Ask the owners of almost every tax-exempt property in York City to voluntarily donate 25 percent of what their municipal tax bill would be if they were taxed. Make the requests specific, and be persistent.
If they are successful, the campaign would infuse the cash-strapped city's 2013 budget with more than $2 million.
"That would be transformational," said Councilman Henry Nixon, one of the campaign's architects. "We're not asking for a huge sum. We're asking for 25 percent."
City residents and business owners, who swallowed a 17 percent increase in municipal property taxes this year, already pay far more in school and municipal property taxes than those anywhere else in York County. The reasons for the disparity are both complex and debatable.
But officials attribute part of the burden to the fact that York City -- like many urban areas -- is a natural warehousing center for tax-exempt properties, which include religious, educational, government and social-service institutions.
In York, about 37 percent of city properties fall into one of those categories. The most abundant? Religious institutions, which account for more than half of the city's tax-exempt properties.
City officials are quick to point out that these institutions benefit from city services, like police and fire protection, but are not required to share the cost. Likewise, Nixon said, city officials are "grateful" for the services tax-exempts provide.
"That's why we're asking for 25 percent and not more," he said.
A new campaign: York City has for years asked its tax-exempt community to pitch in, but the fundraising campaigns have been largely passive and ineffective, said Kevin Schreiber, the city's economic and community development director.
In 2011, for example, tax-exempt properties donated just more than $310,000 to the city. All but $90,000 came from WellSpan, which owns York Hospital.
City officials realized last year they needed a better strategy, Schreiber said. To prevent an even higher tax increase in 2012, Mayor Kim Bracey and York County President Commissioner Steve Chronister said they would raise at least $760,000 in donations from tax-exempt property owners.
Nixon, whose background is in fundraising, got on board. But, he said, the city did not have a database of tax-exempt properties, owners, contact information or assessed values -- "which really slowed this process down," he said.
For the past six months, Nixon and Schreiber have been collecting and compiling that information into a spreadsheet. It's not perfect, Schreiber said, but "it's pretty darn close."
A committee of stakeholders have signed on to share fundraising duties. The committee will be led by John Lloyd, president and CEO of Mantec, a tax-exempt nonprofit in the city that donated $11,350 toward the city's 2012 bottom line.
"We come from the position that we want to be a good community citizen," Lloyd said. "We just feel like it's the right thing to do, to pay our fair share of the cost burden that the city has undertaken to protect us and to serve us."
How it works: Using the new database, officials have calculated how much each entity would owe if it weren't tax-exempt. They plan to ask specifically for 25 percent of that amount, Nixon said.
With a property worth more than $281 million, WellSpan is the biggest fish for city officials to catch. If York Hospital were taxed, the company would owe about $5.7 million in municipal property taxes. Twenty-five percent of that bill is about $1.4 million -- more than six times what WellSpan voluntarily donated to the city in 2011.
Not having been formally asked yet, it's too early to estimate how much WellSpan might be willing to contribute next year, said Keith Noll, president of York Hospital and senior vice president of WellSpan.
"As has always been the case in the past, we're more than happy to sit down with Mayor Bracey and talk about the needs of the city," Noll said. "The financial strength of the city is as important to us as it is to the community we serve."
WellSpan's donations added up to closer to $800,000 in 2011 when contributions to the school district and economic-development projects in the city are included in the total, Noll said.
That's on top of $18 million in free health care WellSpan provided last year, said Maria Royce, WellSpan's senior vice president of planning and community development.
"Nonprofits were really developed to fill a gap in our communities. We feel like we've been a very effective partner in filling those gaps and working to meet the needs of the city of York," Royce said. "But we recognize there's a bigger challenge here."
On the opposite end of the assessment spectrum are the owners of churches, many of whom will be asked to donate less than $1,000.
There are a few exceptions. For example, disabled veterans -- who are legally tax-exempt -- will not be courted for donations. The city will also spare government entities like the U.S. Postal Service, which owns a post office in town.
For now, Schreiber said, it seems that asking the state or federal government to donate would amount to a re-routing of taxpayer dollars from entities that already funnel grant money into the city.
"It's not unreasonable that we may ask at some point," he said.
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