September 29, 2012 — As more Massachusetts cities and towns consider asking nonprofits to make, or increase, voluntary payments in lieu of taxes—called PILOTS—a new study shows that a tiny fraction of the state’s more than 32,000 nonprofits make such payments and that the average amount collected by municipalities amounts to less than one-quarter of one percent of their general revenue.
The study, conduced by the
Lincoln Institute of Land Policy, a Cambridge-based think tank that focuses on land taxation issues, released yesterday, provides more detail on PILOTS than was previously available in any single source.
According to the study, within a fiscal year 113 nonprofits jointly contribute an average of $423,675 in PILOT payments to each of 88 Massachusetts cities and towns. Boston in fiscal 2012 collected the greatest amount, $19,402,506, representing 0.58% of its general revenue and 1.45% of property taxes paid.
Although the new study provides a more detailed picture of PILOT payments than was previously available, the Lincoln Institute cautioned that the picture is less than complete, because there is no single source of information on PILOT payments. Very likely more than 113 Massachusetts nonprofits make PILOT payments and more than 88 cities and towns in the state receive such funds.
The institute noted that its findings “provides a reality-check for anyone expecting [PILOTS] to be a panacea for cash-strapped cities and towns.” For the 218 localities studied nationally, PILOTs, account for only 0.13% of general revenue, the same amount that local governments raise from charges for parking meters and parking lots.
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