Given the state of the economy, most university administrators are worrying about their institutions’ budgets. But Brown University’s president has two budgets on her mind: Brown’s and the one crafted by the City of Providence. The municipal government -- facing a budget shortfall after several years of state cuts and stopgap measures -- is asking Brown to increase its voluntary payments to the city, payments made because the university, like many nonprofit institutions, is exempt from paying property taxes. But the negotiations have not gone smoothly. And the city, which the mayor says is facing bankruptcy, is now considering asking the state to revoke the university’s tax-exempt status -- an unprecedented move that could cost the university tens of million of dollars – unless Brown agrees to strike a deal that pleases city officials before June, when the mayor says the city will run out of money. But getting to an acceptable agreement, especially within a short time frame, is tough. Agreements to make "payments in lieu of taxes," or PILOTs, as they are known, come in many forms, are based on varying criteria, and can vary wildly in amount, so applying a single standard to evaluate whether any of the offers Brown or Providence put on the table as “fair” is not easy.
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