It's become an annual ritual: Every summer, the city of Boston releases its latest report on its Payment In Lieu Of Taxes, or PILOT program — in which Boston asks its biggest and wealthiest nonprofits to make voluntary contributions to the city according to the value of property they own.
And every year, many of those nonprofits (some more than others) decline to contribute the amount requested.
In its most recent report, for the 2018 fiscal year, the city reported that it received roughly $34 million in PILOT payments — more than the year before, and the year before that — but only about three-quarters of what the city asked for.
The city's request is just that — a request: state law exempts nonprofit institutions from paying local property taxes.
But Boston's biggest nonprofits — including major universities like Harvard, Boston University, Boston College, and Northeastern; and major hospitals like Beth Israel Deaconess and Mass General Hospital — own and occupy billions of dollars worth of property in Boston alone; and would, were they not exempt, owe the city hundreds of millions of dollars annually.
On the other hand, those institutions could choose to contribute nothing (a few do), and the Walsh administration announced its annual PILOT contribution totals, as in years before, as proof that the city's PILOT program is a success.
But unlike in past years, members of Boston's increasingly boisterous City Council called a hearing to question whether these contributions are, in fact, good enough. And activists of various stripes who feel the city has been taken for a ride by the its wealthiest nonprofits — big education, as they framed it, in particular — were eager for the chance to give voice to their grievances.
The hearing, Councilors Lydia Edwards, who represents East Boston, Charlestown and the North End; and At-Large Councilor Annissa Essaibi-George, drew overflow attendance and lasted more than four hours.
While representatives of the Walsh administration largely defended the program's success, councilors took turns poking holes in that narrative.
Essaibi-George called attention to the fact that while the city credits about half of each nonprofit's contribution to "community benefits," ten of the 47 participating nonprofits failed to submit any reports detailing what those "community benefits," in fact, are.
Councilor Kim Janey pursued a similar line of questioning, asking, "Who gets to determine what that benefit looks like and whether or not it is truly a benefit to the community?"
The answer: the nonprofits do.
Councilor Lydia Edwards pointed to another odd fact about the PILOT program: the city's requests per institution are based on years-old property valuations — even while property values have increased across the city and while institutions like Harvard have been rapidly expanding and developing.
Testimony from activists and advocates for various causes, especially affordable housing, was more severe.
Enid Eckstein, speaking for a group called the PILOT Action Group, acknowledged the importance of the "Eds and Meds" economy of Boston, but said the city's PILOT program "falls short."
While overall payments have increased slightly over the year, "increasingly fewer institutions pay their fewer requested amount," Eckstein said. "These institutions hold billions in endowments, have millions in surplus revenue and paid more this year in hedge fund management fees than they pay to the city in PILOTs."
"Our homes increase in value ... we are paying increasingly more and more," Eckstein said. "It is not sustainable to ask Boston taxpayers to increasingly share the burden."
Several Northeastern students testified as well, pointing out that the university contributed only 13 percent of the city's request.
The PILOT program was not without defenders.
Sam Tyler, of the Boston Municipal Research Bureau, emphasized that Boston's nonprofits have no obligation to contribute any such payments, and that the Walsh administration has done commendable work in maintaining the program.
Rob McCarron, Senior Vice President and Counsel to the Association of Independent Colleges Universities of Massachusetts, emphasized the contributions private colleges already make to the city — including educating thousands of students and employing thousands of residents.
"It would be virtually impossible for the city to replicate the depth and breadth of such services," McCarron said.
"The PILOT program, as you've heard," McCarron added, "is voluntary."
WGBH, a nonprofit organization, participates in the PILOT program and in fiscal year 2018 contributed the city's requested amount of $142,277.