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For the 12th time since Boston began making formal requests under revised guidelines in fiscal year 2012, Harvard has again failed to meet the city’s specified contribution to its Payment in Lieu of Taxes program.
The PILOT program asks large, tax-exempt nonprofits in the city to pay voluntarily a quarter of what they would otherwise pay in property taxes to help supplement the city’s budget, more than 70 percent of which is funded through property taxes.
Participating institutions — like hospitals, universities, and museums — together hold billions of dollars in real estate they do not pay taxes on under state law.
PILOT programs have been popular in cities around the U.S. from New York to New Haven to close part of that gap in light of the tax-funded services such nonprofits benefit from, including snow removal, police, and fire operations.
Boston’s program allows institutions to write off up to 50 percent of their payment requests in community benefits, which the institutions have wide latitude to determine. In keeping with recent years, Harvard — which is one of the largest nonprofit landowners in the city, at about $1.5 billion in land holdings — used the full community benefits deduction while paying about 60 percent of the remaining cash request.
In a statement, Harvard spokesperson Amy Kamosa wrote “Harvard’s voluntary participation in the City’s PILOT program is one of the many important ways in which the University engages with the City of Boston.”
“In addition to making a consistent PILOT contribution, Harvard delivers a deep portfolio of community-facing programs and initiatives,” Kamosa added.
This year, the program has seen increased attention from activists and elected officials pushing for its renewal more than a decade after then-Boston Mayor Thomas M. Menino put the current guidelines in place — the program is still using valuations from 2009 as the basis for its requests — and for the involvement of residents in determining what constitutes a community benefit.
The Boston City Council discussed the current state of the program during an April hearing, when several councilors and activist groups stressed the need for updated valuations of institutions’ land.
The PILOT Action Group, a vocal critic of the current setup, is also demanding from the city a new commission to examine the program and to set clear standards for what qualifies as a community benefit.
Publicly, elected officials have made statements in support of such a revamp.
Councilor Elizabeth A. “Liz” Breadon, who represents Allston and Brighton, wrote in a statement that “the time is ripe for a strengthening of partnerships between the City and large nonprofit institutions.”
“Across the board, there’s room to improve the current level of transparency and the relevance of in-kind contributions,” she added.
During her campaign for mayor, Michelle Wu ’07 committed to both creating a task force and formalizing the process for determining community benefits, although she has yet to do either. Her office did not respond to a request for comment.
In June, the Massachusetts legislature’s revenue committee held a hearing on a bill proposed by State Rep. Erika Uyterhoeven of Somerville that would allow municipalities to require PILOT compliance from nonprofit institutions. Uyterhoeven’s office did not respond to a request for comment.
A previous version of the bill failed to make it to a vote, though this bill’s fate remains to be seen.
Enid Eckstein, co-chair of the PILOT Action Group, said the group had met with staff from the mayor’s office “a couple of times” over the past year, but that “we’re not any closer towards the starting line, let alone the finish line.”
Earlier this year, the PILOT Action Group reached out to “the big four” universities — Boston College, Boston University, Harvard, and Northeastern University — requesting new meetings with leadership amid the group’s effort to build momentum for a renewal of the PILOT program.
Northeastern met and told the group, “We need to have the city tell us what to do,” Eckstein said.
She also said Harvard did not agree to meet, referencing a prior meeting between the two parties five years ago in the University’s response to the group’s request.
“It was like the cold shoulder,” she said.
Referencing the pioneer status Boston gained after first launching the PILOT program, Eckstein said the city could maintain its role in forcing the program to evolve.
“Boston, you have the opportunity to lead,” she said.
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