Boston Plans to Ask Nonprofits for Additional Help

Boston hospitals, universities, and other tax-exempt nonprofits may be asked to contribute tens of millions of dollars more to city coffers to help pay for basic municipal services such as police and public works, the Boston Globe reports.

After fourteen months, a mayoral task force made up of representatives from government, the nonprofit sector, academia, and organized labor has nearly completed its evaluation of the city’s PILOT program, under which nonprofits voluntarily pay cash and provide services in lieu of property taxes. Because each agreement in the program is negotiated individually, payments vary widely, with some groups paying millions and others paying significantly less. The city is pushing nonprofit institutions to gradually increase their contributions to the program to 25 percent of what they would owe in taxes if they were not exempt, a change that would more than triple the amount currently paid by some of the city’s biggest landowners. Indeed, according to preliminary figures, the new formula would increase payments by hospitals and universities in the region by almost $25 million over the next five years.

To soften the impact of the proposal, officials have suggested that institutions could cover up to 50 percent of their payments by offering community programs such as free prostate cancer screenings in public housing or scholarships for area high school students. The city recognizes that “these are challenging times, which is why what is being discussed would be a change phased in over time,” said Lisa Calise Signori, Boston’s director of administration and finance. “The services the city provides can’t be borne by taxpayers alone.”

For their part, hospitals and universities have argued that higher payments in lieu of property taxes would force them to lay off workers and pass on to students and patients higher tuition and medical costs. “We want to do everything we can to make sure that the city is on sound financial footing and not laying off police and fire [fighters],” said Conference for Boston Teaching Hospitals executive director John Erwin. “We realize the predicament the city is in, but we are also in a similar predicament.”

Ryan, Andrew. “City Asks Exempt Sector for Help.” Boston Globe 4/06/10.


Source: PND