Boston to get pretty big PILOT payments from Boston University
Big cities have lots of civic institutions, including universities and hospitals. Tax exempt, they don't pay property taxes, and since property taxes are the primary way cities earn revenue, that makes it harder to fund operations.
In Canada, nonprofits mostly still have to pay property tax, unless they get an exemption, which is pretty hard. The municipality has to believe it gets big benefits in return.
Over the years, many cities including Providence Rhode Island, Pittsburgh, New Haven Hartford--50% of the city's property is tax exempt, Philadelphia and Boston have tried to get decent sized "payments in lieu of taxes" from major nonprofits and they've been unsuccessful. (In Connecticut, the state reimburses jurisdictions for a percentage of lost property tax issues due to tax exemptions. Decades ago under Nixon, the federal government had a similar program for cities and federal undertakings.)
In Philadelphia, rather than submit to any kind of tax, the University of Pennsylvania, its hospital system, Drexel University and Amtrak's 30th Street Station joined together to fund the University City District business improvement district through annual contributions.
So the fact that Boston has managed to get a 5 year agreement, and about $20 million per year from Boston University is a big deal ("BU to pay city of Boston more than $104 million over five years in record deal," Boston Globe). It's a mix of money and in-kind services, but the cash part is still pretty hefty.
Now for Harvard, MIT, the big hospitals, other universities....
Labels: college students and the city, colleges and universities, property tax assessment methodologies, property tax exemptions, public finance and spending, universities and economic development


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