ERIE, PA. Official hopes to charge colleges for the use of some city services
The two Erie schools would get a bargain at the per-student rate, the finance director says.
ERIE, Pa. (AP) -- Property owned by Mercyhurst College and Gannon University is tax-exempt, but under a proposal being pushed by Erie Mayor Rick Filippi, the schools' students might not be.
Filippi, a Gannon alumnus, wants to charge the schools a $50-per-student fee for the use of city services, such as police and fire protection, which would pump more than $300,000 a year into city coffers.
Gannon spokesman David Fabian said the city has mentioned the proposal, "but there really hasn't been a lot of subsequent discussion about it."
Mercyhurst President William P. Garvey said he agrees in principle "that we should do something to help the city out." But Garvey also noted that the school has made donations to the city and bought police vehicles for it in the past.
"I'm in a position where I have to deal with the city's high rate of tax-exempt properties," Filippi said. City records show that about 40 percent of all city properties are tax-exempt.
The city already has a Payment In Lieu of Taxes, or PILOT, program under which Saint Vincent Health Center, Hamot Medical Center and 18 other nonprofit agencies agree to pay half of the local property taxes they would be assessed if their real-estate holdings weren't tax-exempt.
Saint Vincent, for example, pays $780,000 to the city, Erie County and the Erie School District under the program.
Erie Finance Director Chuck Herron said Clarion University has an agreement in which it pays Clarion Borough and Clarion Township for municipal services in lieu of property taxes.
Herron said the two Erie schools would be getting a bargain at the $50-per-student rate.
With 3,358 students, Gannon would pay the city $167,900 annually. The school's real estate is assessed at $93 million, meaning it would pay the city $923,000 a year in property tax if it were not exempt, city records show.
Mercyhurst has 2,930 students, meaning it would pay $146,000 a year -- a fraction of the $571,000 it would pay in taxes on properties assessed at $57.6 million.
Getting the money
If the plan were enacted, the schools would have to decide where to get the money.
Fabian said Gannon's board "would decide whether to pass it to students or whether there's another option."
Garvey said the costs would likely be passed on to students at Mercyhurst.
Both schools raised tuition for the current year.
Gannon's cost jumped 5.5 percent to between $22,070 and $23,010, depending upon a student's course of study. That includes room, board and other fees.
The bottom line for Mercyhurst students jumped 5.6 percent -- or $1,165 -- to $21,849, for tuition, room and board.
"The bottom line is, it's a fee for services rendered," Filippi said. "How much value do they place on police and fire service? That's what this is about."