Boston PILOT revenues increase in 4th year of program

The city of Boston collected $27.9 million through its payment-in-lieu-of-taxes program for tax-exempt institutions in fiscal 2015, an increase of 84 percent over fiscal 2011, the Boston Municipal Research Bureau reported on Aug. 31.
 
Receipts as a percentage of requests fell, however, from 90.7 percent in fiscal 2012 to 68.6 percent in fiscal 2015, according to the research bureau.
 
The fiscal 2015 total is $1.9 million higher than the prior year’s payments. A separate Massport PILOT program took in $17.9 million in fiscal 2015.
 
Boston’s PILOT program applies to the largest 49 private, tax-exempt institutions with property values of $15 million or more. Over five years, the city is asking the institutions to annually increase their PILOT payments to reach 25 percent of what they would pay if their properties were taxable, with community services able to represent half of the goal.
 
The fact that the fiscal 2015 total is below the city’s request is not unexpected, according to the research bureau. Because the program is voluntary, initial payments to show good faith could be tempered in future years, reflecting further negotiations and changing economic conditions, the bureau reported.
 
Total payments from medical institutions increased by 169 percent over fiscal 2011, and the medical institutions paid 94 percent of the goal.
 
Payments from educational institutions increased by 28.4 percent since fiscal 2011, but total payments have fallen from 88.3 percent of the request in fiscal 2012 to 51.8 percent.
 
Fiscal 2016 is the fifth year of the program, and each institution will be asked to increase its payment by the same increase as in each of the past four years. The research bureau expects actual receipts as a percentage of the request to decrease again in fiscal 2016.
 
The MMA’s legislative package for the current session includes a bill that would allow cities and towns, upon local acceptance, to require certain tax-exempt organizations to make payments in lieu of taxation to host cities and towns equal to 25 percent of what they would pay if the property were not exempt.
 
The MMA’s bill would require cities and towns to adopt bylaws or ordinances to provide for agreements between the municipality and organizations that may provide for exemptions from payment, consideration of community benefits as payment, and administration of payments.
 
The Legislature’s Joint Committee on Revenue held a hearing on the MMA’s bill on May 12.