1. PILOT Take Two By: Leigh Tucker

    PILOT Take Two By: Leigh Tucker

     

    Last year, with our blog post, “A drop in the bucket”  we addressed the Boston program designed to incent Boston nonprofits to hire additional employees with credits against their PILOT (Payments in Lieu of Taxes.)  Mayor Menino got some nice press out of the proposal which we found unexciting considering the numbers being bandied about.  

    With far less than $10 million in total from all the charities and educational institutions involved and a City of Boston budget of more than $2 billion, the program offered a credit of a few thousand dollars when nonprofits made certain kinds of hires.  The money being offered seemed (and still seems) inadequate, especially when compared to the true expense of supporting a full-time employee (benefits, salary, overhead.)

    Now, a study has come out of the Lincoln Institute of Land Policy, which says PILOT programs are, in not so many words, a waste of time.  The revenues from even the biggest PILOT programs represent just over 1/10 of 1% of a city’s revenues. (Massachusetts is one of the largest programs.  The Northeast accounts for 75 to 80 percent of all PILOT activity.) If cities spent even a fraction of the time they spent negotiating PILOT payments on something more constructive, like, working with nonprofits to help provide additional core services to the needy residents of the community, everyone would be better served.

    Boston has yet to collect more than a few million in a single year from its nonprofits.  Meanwhile, the goodwill, visibility, and performance of these organization’s missions is priceless.

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