What Are PILOTs?
Although MANSC tracks many bills, we are particularly vigilant in our opposition to legislation that would create PILOTs, or Payments In Lieu Of Taxes. These are payments requested or required by a city or municipality from a nonprofit organization that owns tax-exempt property within city or municipal limits. Think of it as a property tax by another name.
Depending on the bill, institutions that opt-in may receive deductions for contributions made to the community, such as educational, cultural, and social programs. The financial support students and staff provide to local businesses often is not taken into consideration.
Municipalities typically request PILOTs to help defray the costs of public services such as police, fire, roadways, and more. These services are funded in part by local property taxes. In Boston, for example, more than 50 percent of property is exempt from taxes. This represents a massive amount of revenue that the city is missing out on.
This subject is of particular concern in the time of COVID-19, as city and town governments are feeling the financial strain of the pandemic while they are receiving less state aid. MANSC is concerned that many cash-strapped communities will turn to PILOTs for additional revenue.
PILOTs pose a clear threat to the financial stability of our institutions and the services we provide to the community.