A Vision for Boston:
Questions for the 2009 Mayoral Candidates

Day 1: PILOTs

What is the basis by which nonprofit institutions should make payments-in-lieu-of-taxes (PILOTs) to Boston in a way that provides a reasonable payment for city services without harming the economic benefits of the institutions?

Response from Mayor Menino:

Boston is fortunate to have many world-class universities and hospitals in our city; they create employment opportunities for our residents, increase the cultural vitality of our communities, and help make Boston a global center for innovation and entrepreneurship. These institutions, which comprise 5% of the land area, also consume a variety of City services without paying their equivalent share in property taxes.

To increase tax equity and lighten the property tax burden on Boston residents and businesses, we have created one of the most successful Payment in Lieu of Taxes (PILOT) programs in the country. Many institutions regularly contribute both voluntary PILOT payments to the City and additional benefits to Boston residents, such as scholarships for youth and job training opportunities for adults.

However, we are continuously working to improve the PILOT system, creating one that is even more beneficial for residents and more equitable across institutions. I recently created a task force to take the next step in improving our PILOT system: determining a consistent basis for PILOT payments. This group of leaders, which comprises representatives from the public, the business community, and the institutions themselves, will release a report on their findings this fall.