Boston Mayor Kevin H. White will file suit seeking reimbursement from the Massachusetts legislature for tax money the city currently loses from tax-exempt institutions, a spokesman for the mayor's office said yesterday.
The outcome of the suit, to be filed at the Suffolk Superior Court within a month, will not affect Harvard's decision to pay Boston $300,000 in lieu of taxes next year, Robin Schmidt, assistant vice president for public affairs, said yesterday.
20 per cent
White will also ask the state to pay Boston 20 per cent of the money the city would receive if the tax-exempt institutions were required to pay property taxes, Dennis Sullivan, assistant press secretary for the mayor, said. Last year, that would have been over $35 million, he said.
"A decision in our favor by the court would greatly increase the likelihood of the legislature passing the legislation," Sullivan said.
In the past, White has asked the legislature to grant the city the power to collect taxes directly from tax-exempt institutions, but lack of success in that direction has prompted this year's suit and proposals, Sullivan said.
"We recognize that the tax-exempt status of institutions such as Harvard is reasonable--Harvard is an asset to the city--but we can't afford the loss of revenue," Sullivan said.
At present, 58 per cent of the land in Boston is owned by tax-exempt institutions, such as universities, museums, and the federal government.
"The legislature has forced us to rely on the property tax--a tax universally recognized as regressive--and has refused to allow Boston to levy a 1 per cent income tax, as 1 per cent commuter tax, or a city sales tax," Sullivan said.
"We've had to rely on voluntary in-lieu-of-tax payments, but most of the tax-exempt institutions, even Harvard, can't afford it any more than we can," Sullivan said.
In February, Harvard voluntarily agreed to pay Boston $300,000 annually for 40 years in lieu of taxes for housing the University will build on Soldiers Field Road, adjacent to the Business School.
It was the first time that Harvard agreed to make this kind of payment to Boston, although it has been making similar payments to Cambridge since 1924.
The agreement provides that Harvard continue the payments even if the legislature decides to reimburse Boston.