To increase the city’s revenue, City Councilors on Wednesday suggested requiring universities — which are exempt from property taxes — and other non-profit institutions to pay more to the city in the form of PILOTs, or Payments in Lieu of Taxes.
PILOTs are an alternative way for institutions to contribute to the city’s revenue. Thirteen colleges and universities, including Boston University, participate in the program, which brings in about $21 million annually to the city. The largest PILOT contributor is the Massachusetts Port Authority, which pays nearly half of that total — $11.1 million, councilors explained.
Councilor-At-Large Stephen Murphy, who sponsored the Ways and Means Committee hearing, said he was concerned that Boston’s taxpayers bear the financial burden of these institutions while the colleges and universities pay less than their fair share.
“Fifty-three percent of our land and buildings in this city are tax-exempt,” Murphy said. Boston’s institutions of higher education, he said, “bring much to the city, but they also expend much of the city’s resources.”
Citing the violent celebrations following last year’s Patriots and Red Sox wins, Murphy said college students participated in the riots, so colleges and universities should be held responsible for contributing more money to the city.
“We know it’s coming mostly from university and college students,” Murphy said, referring to the post-game “revelry” that killed two 21-year-olds last year.
In addition, Murphy said, the city’s 250,000 students put a strain on the city’s police, fire and emergency medical services. Students also benefit from city-provided services such as public transportation and parks, which are funded by Boston’s taxpayers, Murphy said, adding that the city should create a “formula that is fair to Boston taxpayers.”
Councilor Chuck Turner (Roxbury, Dorchester) also said the city should press for more payments from colleges and universities.
“I think these institutions are fat cats,” he said.
Murphy agreed, saying of the high costs, “let the colleges eat it, not the kids.”
Despite the councilors’ insistence that universities drain city resources, a 2002 study conducted by the city shows that more than half of Boston’s tax-exempt land is owned by the city and state. Universities account for less than one twenty-fifth of the tax-exempt land, according to the study.
Ways and Means Committee Chairman Michael Ross (Back Bay, Fenway) admitted that the PILOT program is “somewhat haphazard.” He singled out Boston University as an example of how the program should work, saying, “BU is doing a great job paying $5 million a year.”
According to Ross, an issue that has been “talked about ad nauseum during the campaign,” the PILOT program has remained in its current form since the mid-1980s.
City Assessor Ronald Rakow, who testified at the hearing, touted Boston’s PILOT program.
“It is by far the leader in the country as far as the amount of revenue we’re getting,” Rakow said.
“The PILOT program is what it is — it’s voluntary,” he said, noting the disparity between the amounts that different colleges and universities contribute.
Rakow said the city cannot make the PILOT program mandatory unless state legislation is passed.
Representatives from several educational institutions in Boston testified at the hearing, listing the ways in which their institutions contribute to the city aside from contributions through the PILOT program.
Tom Keady of Boston College , who spoke at the hearing, said BC provides housing for 83 percent of its students — the highest rate in the city — in addition to removing its own trash, plowing its own streets and regulating its own police force.
Other representatives noted that students also contribute a great amount of money to Boston’s economy.
This is an account occasionally used by the Daily Free Press editors to post archived posts from previous iterations of the site or otherwise for special circumstance publications. See authorship info on the byline at the top of the page.
