Councilor Flynn Calls for Hearing on Boston’s PILOT Program

Special to the Sun

Boston City Councilor Ed Flynn filed a hearing order last week calling for a review of the Payment In Lieu of Taxes (PILOT) Program in the City of Boston. The PILOT program was established to encourage large, tax-exempt, nonprofit institutions in Boston to make annual, voluntary cash contributions or community benefits due to basic city services provided by the city such as police, fire, and snow removal. 

Boston is fortunate to be rich with higher education, medical, and cultural institutions that play a critical role in both our city and regional economy, and the residents of Boston benefit greatly from employment, research and innovation, and the services that they provide. At the same time, the city is heavily reliant on property taxes for revenue, and our large nonprofit institutions – which also receive essential services from the city – have a strong concentration of property that represents approximately half of Boston’s real estate. Past analysis has indicated that Boston would have been able to generate approximately a quarter of the city’s tax levy had the property of our large nonprofit institutions been taxable. 

The City of Boston’s PILOT program seeks 25% of what these institutions would be expected to pay to the city had their property not been tax exempt, to reflect the portion of the budget to essential services – half in a cash payment to the city, and half in the form of community benefits like scholarships, parks and open spaces, workforce development and job-training programs. Last year, through the annual PILOT program, our large nonprofits reportedly contributed $35.7 million in cash, with $62.1 million accepted by the city in PILOT community benefits. In FY22, our large nonprofits contributed $35.5 million in cash contributions, with $56.9 million in community benefits also credited by the city.

“We are very fortunate to have many world-class higher education, medical, and cultural institutions that call Boston home. Our city’s PILOT Program asks our large institutions to also contribute towards the funding of public safety and city services, as well as to provide community benefits for our neighborhoods and residents,” said Councilor Flynn. “I’m calling this hearing to review the PILOT program and discuss ways where we can work with our nonprofit institutions to strengthen this program.” 

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