The expansive parks, manicured athletic fields and crowded commercial corridors suggest a thriving community.

But frankly, Manheim Township could use a few bucks.

And now, after raising property taxes last year for the first time in two decades, officials are looking at another way to generate additional revenue: They plan to ask nonprofit organizations to pay a portion, however small, of what they'd owe the township if their properties weren't exempt from taxes.

It's not the first time the township has solicited payments in lieu of taxes, or PILOTs. For several years beginning in the mid-1990s, Township Manager/Secretary Michael Rimer said, the township mailed out an annual plea. He's not sure when that was discontinued, but it wasn't a big issue because in boom times, there was no need.

Times have changed.

"If we could capture a portion of the nearly $795,000 exempt tax revenue, this would be helpful," Rimer said.

Across the county and state, other officials are beginning to think the same thing.

Countywide, $3.6 billion worth of property is exempt from taxation. Schools and churches, nursing homes and other "purely public charities" are exempt from county, municipal and school district real estate taxes, by state law; preserved acreage, "clean and green" land and disabled veterans who own real estate can also get exemptions.

Both the number and assessed value of exempt properties has grown steadily here. In two county municipalities — West Donegal Township and Denver Borough — at least one-fifth of the total assessment is exempt from taxation. In Lancaster city, it's more than one-quarter. In Millersville Borough, it's one-third.

In Manheim Township, the figure is comparably low — 281 of nearly 14,000 parcels are exempt, a mere 2 percent. But those exempt parcels are assessed at $374 million — just under 11 percent of the total assessment.

Only a few municipalities or school districts ask nonprofits to make PILOTs, and no local school districts do. But many say they're at least considering it.

Nonprofits are worried about a rising number of requests, saying their budgets are also stressed — and they are already providing services that government would otherwise have to fund.

Patrick Hopkins, Lancaster city's director of administrative services, said it was only a matter of time before cash-strapped suburban governments began looking to nonprofits as one way to help close budget gaps.

"And that time," he said, "is here."

More exempted
According to figures provided by the Lancaster County Tax Assessment Office, there are 5,385 tax-exempt parcels in the county — up 12 percent since 2006.

The City of Lancaster has by far the largest number of exempt properties — 640, representing $748 million in assessed value. The city has long sent out an annual appeal to nonprofits and gets about $1.5 million in PILOTs annually — most of it from Lancaster General Hospital and Franklin & Marshall College.

This year, Hopkins said, the appeal is going to be more targeted: "We've been working with the Lancaster Alliance," said Hopkins, with an intern "doing an incredible amount of work" to identify the owners of each individual exempt property.

"When we used to do the letter, it was a 'Dear Property Owner' thing — our database gives us the property address but doesn't give us the name of the person with the responsibility for making decisions for the organization," Hopkins said. This year the letter will be directed to those individuals — and city officials hope it will produce a more robust response.

Earlier this year the city held a "summit" for nonprofits featuring a presentation on why they should consider giving what they can to the city. It was sparsely attended, Mayor Rick Gray said at the time. "We were preaching to the choir," he said, as most attendees were from organizations that already gave.

Nonetheless, Lancaster has been lauded as a success story by the state team that crafted Harrisburg's financial recovery plan. That plan calls for Harrisburg — where half of all property, most of it owned by the state, is off the rolls — to ask nonprofits for PILOTs.

Here in Lancaster County, only a few ask. Only a few give.

Millersville — where 32.7 percent of all property, most of it owned by the university and Penn Manor School District, is off the rolls — sends out an annual plea. In 2010, Borough Manager Ed Arnold said, that resulted in PILOTs of just $2,800.

"Obviously, we need some state legislative changes to offset the impact," he said. "I have a hard time justifying why 67 percent of the borough's total assessment covers 100 percent of the borough's operating costs."

Columbia Borough also asks for PILOTs and gets about $12,000 from four organizations, said borough Finance Manager Georgianna Schreck. If all 154 exempt parcels were taxable and paid the base (nondiscounted) rate, it would generate $371,143 in revenue.

Denver Borough, where 20 percent of the total assessment is exempt, does not ask for PILOTs — though Borough Manager Mike Hession said he "did pursue this issue with a previous borough council." At the time, though, council "was reluctant to make that [PILOT] request."

Most of the exempt property is owned by Cocalico School District; there are also two cemeteries and five churches. The exemptions, he said, make budgeting difficult, as "an increase in the real estate tax millage rate does not usually net a significant amount of revenue." This year, the borough hiked its millage rate by 9.1 percent, but the $518,000 in real estate tax revenue Denver expects to receive this year will barely cover the cost of police protection from East Cocalico Township ($508,785).

In West Donegal Township, nearly 22 percent of the total assessment is exempt from taxation. The township does not solicit PILOTs, though it is receiving $72,237 this year from Masonic Village, which in 2008 reached an agreement with the township, Elizabethtown Borough and the Elizabethtown School District to pay PILOTS of $25 million through 2027.

The bulk of the money goes to the school district; West Donegal will get $1.5 million over the period.

The agreement came after a landmark Pennsylvania Supreme Court case granting a Carlisle retirement community a full exemption from property taxes on its nursing home, personal care facilities and apartments. "We looked at that and believed that, based on the charity we do, we would be the poster child for full exemption," Masonic Village CEO Joseph Murphy said.

Yet the retirement community agreed to make payments in lieu of taxes "because from a philosophical standpoint, the Masonic fraternity believes in supporting the community"; had Masonic Village gone to court, won and ceased making payments, "that would leave the county, township, borough and school district in a major bad way."

In Manheim Township, Brethren Village retirement community last year filed an appeal with the Lancaster County Property Assessment Office, citing the 2007 Supreme Court case and arguing that its entire campus should be exempt from property taxes. Ultimately, Brethren Village reached an agreement to pay the school district a quarter of what it had been paying in taxes — which school officials said amounted to a $500,000 decrease in revenue — and pay the county about half of what it had been paying.

Reasons for increases
John Mavrides, director of the county's assessment office, said retirement communities that once were taxed going off the rolls may be one reason the number of exempt properties are rising. Other factors could include nonprofits expanding or buying additional parcels.

In Manor Township, three parcels of land owned by PPL are expected to be transferred to the Lancaster County Conservancy and become tax exempt, said Chris Johnston, business manager for the Penn Manor School District. The conservancy, he said, "has offered to help ease the transition when the transfer occurs, but they have discussed only a one-year PILOT."

No local school districts ask nonprofits to make PILOTs — in part, one local school official said, because schools provide few services to nonprofits.

Rimer, the Manheim Township secretary, said the situation with municipalities is different. They do provide services such as police protection, so more municipalities feel it's legitimate to at least ask nonprofits to contribute toward these costs.

Nonprofits are growing increasingly alarmed by the entreaties.

In Harrisburg, after the state team that developed the recovery plan for the financially stressed city said Harrisburg should turn to nonprofits, the Pennsylvania Association of Nonprofit Organizations and the National Council of Nonprofits in Washington, D.C., responded in a July 8 op-ed in the Harrisburg Patriot newspaper.

"Trust us," wrote Joe Geiger, PANO executive director, and Tim Delaney, president and CEO of the National Council of Nonprofits. "Nonprofits in Harrisburg and across Pennsylvania feel the city's financial pain. The recession has ripped nonprofits financially as demands for their services have skyrocketed while their revenues have nosedived. Corporate contributions have evaporated, foundation grants declined, government payments delayed on legally binding contracts, and even individual giving sagged by 20 percent, according to the IRS.

"Nonprofits are safety nets for individuals; if the city grabs us as its own life preserver, it will take everyone down," they wrote.

They also questioned whether nonprofits can legally divert money donors give to their organizations for programs to municipal coffers instead.

In an interview last week, Geiger acknowledged that the number of PILOT requests statewide "are trending upward. The budgets of local governments, government at all levels, are suffering — and when you're suffering you take a look around to see if there's anything you missed," he said.

Geiger said nonprofits fear that a proliferation of PILOT requests could mean nonprofits have a harder time raising money. "If I'm out asking people to contribute to me and they know I have to turn around and pay a PILOT, some might not contribute, feeling that 'We've already paid our taxes, and now we're just paying more tax,' " he said.

Geiger, who grew up in Willow Street, said some municipalities fail to consider the economic contributions already made by nonprofits. "To have an exemption in Pennsylvania, one of the criteria is you have to relieve government of some burden," he said.

"What would Millersville be like as a community if the university was taken out of it? People come, stay at the hotel, students buy goods, fill gas tanks. It would be a very different little village if it weren't for the university."

Still, the municipal financial crunch — not just in Harrisburg but everywhere — is so severe that the asking, if not the giving, is likely to continue.

Hopkins, Lancaster's director of administrative services, notes that if exempt properties in the city (not including the city's own property) paid taxes at the current millage rate, it would produce about $8.5 million in revenue.

"Put another way, if every property paid taxes on its full assessed value," he said, "the city's real estate millage rate could be reduced by 31 percent and still provide for the same amount of annual tax revenue to the city."

In Manheim Township, Rimer admits it may not be fair to expect nonprofits to support township parks, recreation facilities or the public library. But "tax-exempt institutions are certainly receiving police services, snow removal, fire protection and similar basic core public services."

So he's "refreshing" his mailing list of nonprofits, preparing to ask.

"We'll see how this effort goes," he said.

Gil Smart is associate editor of the Sunday News. Email him at gsmart@lnpnews.com, or phone 291-8817.