Boston nonprofits contributed about $17 million less than requested by the City last year as part of a program meant to encourage large institutions to voluntarily help make up for some of the hundreds of millions in annual revenue the city would realize if those institutions paid property taxes.
The program, known as “Payment in Lieu of Taxes” or PILOT for short, has been in place for over a decade.
But despite efforts to revamp the PILOT program in 2011 and 2012 – including a more aggressive approach to accounting for increasing property values -- the program raises only slightly more for the city than it did in those years.
And even as Boston is booming, nonprofits seem less, not more willing to meet the city’s requests: While the overall contribution from these nonprofits was slightly higher than the year before, it was less, relative to the city’s request, than in 2016.
The city can’t force any of these nonprofits to help make up the gap. They are exempt under state law.
In a city like Boston, that means a lot of property – and a lot of extremely valuable property – goes untaxed, to the tune of hundreds of millions of dollars (if not more) in unrealized revenue every year.
The city can, however, ask -- and every year it does.
The 49 nonprofits that participated in Boston’s PILOT program – a list which includes Harvard, Boston University, Northeastern, Boston College as well as a host of hospitals and cultural institutions – did contribute a combined $32.4 million in voluntary payments to the city in Fiscal 2017.
That’s about one percent more than the previous year – but it’s a proportionately smaller contribution compared to what the city requested, a number that is based in part on the increasing values of the properties owned by those nonprofits.
The city had requested a total contribution of about $49.5 million; last year’s PILOT contributions represented 65 percent of that request, down from 68 percent in 2016 and 69 percent in 2015.
(WGBH, a nonprofit, participates in the PILOT program. Last year, WGBH contributed the city’s requested amount of $138,800)
Some nonprofits paid more of their requested share than others.
Among the larger institutions that came closest to the city’s ask: Massachusetts General Hospital, which contributed about $6.9 million, and Brigham and Women’s Hospital which contributed $3 million – in each case about 98 percent of what the city had proposed.
Boston University, which tops the list in terms of total property value and is exempt from at least $64 million in annual taxes, contributed $6 million – about 75 percent of what the city requested.
But other nonprofits’ contributions – especially universities and colleges -- were less in line with the city’s expectations.
Harvard University, whose Boston property alone is exempt from at least $48 million in annual property taxes, contributed $3.2 million – slightly more than half of the roughly $6 million requested by the city.
And Northeastern University, exempt from at least $44 million in annual property taxes, contributed $1.3 million, less than one-fourth of the city’s PILOT request.
