Special to the Times
At last week’s City Council meeting, Boston City Councilor Ed Flynn filed an order for a hearing to review the Payment in Lieu of Taxes (PILOT) Program in the City of Boston. Boston is a city with a large number of colleges, universities, hospitals, museums, and other cultural institutions. They are a critical piece of our city’s economy and character, but are also tax-exempt and represent over 50% of Boston’s real estate property. Boston provides critical services, such as public safety protection among others, to our tax-exempt, large nonprofit institutions, while our city remains largely reliant on property taxes for funding – with three quarters of the City’s FY25 $4.64 billion budget derived from property taxes.
The PILOT program was established to encourage large, tax-exempt, nonprofit institutions in Boston to make annual, voluntary cash contributions or community benefits – due to basic city services provided by the city such as police, fire, EMS, or snow removal, for instance. The City of Boston’s PILOT program seeks 25% of what these institutions would be expected to pay to the city had their property not been tax exempt, to reflect the portion of the budget to essential services – half of that 25% in cash payments to the city, and and the other half in the form of community benefits – like scholarships, parks and open spaces, workforce development and job-training programs.
According to the City’s report, in fiscal year 2023, 45 institutions provided $35.7 million cash contributions, and 39 institutions submitted PILOT Community Benefits reports totalling $219.8 million, of which $183 million was considered eligible as PILOT benefits.
“Our large nonprofit partners – higher education, medical, and cultural institutions – are crown jewels for the City of Boston that provide services, employment, and research. In the interest of fairness, our city also asks them to contribute towards funding the services that they themselves benefit from, and provide community benefits for our residents,” said Councilor Flynn. “In the final analysis, with over 50% of our land absorbed by large nonprofit partners and long-term fiscal issues in our city – it is critical that we continue to examine both fairness with the people of Boston and fairness among partners who are meeting their responsibilities within the program.”
For more information, please contact Councilor Flynn’s office at 617-635-3203 or [email protected].