PILOT Task Force Releases Recommendations
Members suggest new ways to calculate payments in lieu of taxes
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For Immediate Release
December 22, 2010
Released By:
Mayor's Office
For More Information Contact:
Mayor's Press Office

Recommendations were released today in a final report issued by the nine members of Mayor Menino’s Payment In Lieu Of Taxes (PILOT) Task Force which has been reviewing PILOTs since January 2009.  The recommendations propose a standard level of contributions for all major tax-exempt property owners and set forth a methodology for valuing community partnerships.

Task Force members voted unanimously to accept the following PILOT program recommendations:

  • PILOT program should remain voluntary.  Task Force members hope the “spirit of partnership” continues to be a motivating force with payments in lieu of taxes.  Members did not recommend changes to state law to establish legal or statutory requirements for non-profits.
  • PILOT program should be applied to all nonprofit groups.  Task Force believed that all nonprofits should participate in the program.  However, the Task Force determined that an exception should be made for smaller nonprofits that might lack the resources to fully engage in the PILOT process.  Task Force members suggested a total property value threshold of $15 million for program participation.  
  • PILOT contributions should be based on the value of real estate owned by an institution.  Payments should reflect the size and quality of the institution’s real estate holdings and be consistent with the approach taken for taxable properties. The Task Force believed that PILOTs should be calculated as 25% of what the nonprofit’s property would yield if taxable.  It is suggested that each nonprofit receive an exemption of $15 million in property value. 
  • Give credit for community benefits offered by the institution.  The Task Force recommended that a credit for Community Benefits should be limited to 50% of full PILOT payment.  Examples of community benefits include public/community health initiatives, targeted scholarships for Boston Public School students, and summer jobs.
  • Give credit for property taxes paid on certain properties.  Institutions would receive a credit on their PILOT in the amount of real estate taxes paid on properties that would ordinarily qualify for a tax exemption based on use.
  • Allow institutions and the City of Boston time to make adjustments that are in keeping with the new PILOT calculation formula.  The Task Force suggests that a gradual approach will allow for a smooth transition to the new program and that the new formula should be phased in over a period not less than five years.

“My goal in establishing this task force has been to update the [PILOT] program so that it is fair and consistent,” said Mayor Menino.  “The Task Force’s Final Report & Recommendations is comprehensive and will serve as a foundation for the City’s payment in lieu of tax program as we move forward.”

“The Task Force has concluded that the core principles of a fair and balanced PILOT Program are transparency and consistency,” said PILOT Task Force Chairman Stephen Kidder, an attorney at Hemenway & Barnes LLP and former Commissioner of Revenue for the Commonwealth.  “This Final Report is the product of numerous public meetings held by the Task Force since our appointment by Mayor Menino in January 2009.  Many individuals and organizations participated in the review process and provided the Task Force with helpful and important information which contributed to these recommendations.”

Mayor Menino will review the recommendations to determine the next steps in implementing the revised PILOT guidelines.  

Members of the Mayor’s PILOT Task Force included:  

  • Stephen Kidder, Attorney, Hemenway & Barnes LLP
  • Dr. Robert Brown, President, Boston University
  • Dr. Zorica Pantic, President, Wentworth Institute of Technology
  • Patricia McGovern, General Counsel & Senior VP for Corporate and Community Affairs, Beth Israel Deaconess Medical Center
  • Dr. Thomas Glynn, Chief Operating Officer, Partners HealthCare, Inc.
  • Gail Latimore, Director, Codman Square Neighborhood Development Corporation
  • James D. Gallagher, Executive VP of Communications, John Hancock Financial
  • Stephen Murphy, Councillor-at-Large, Boston City Council
  • Thomas Nee, President, Boston Police Patrolman’s Association

The Mayor’s PILOT Task Force met on a regular basis since February 2009, conducted a public hearing at the Boston Public Library in April 2009, analyzed institutions’ community benefit contributions which have been made historically, reviewed the City’s costs associated with providing essential services to nonprofit organizations, and published an Interim Report.

For further information concerning the PILOT Task Force’s work, please visit http://www.cityofboston.gov/assessing/pilot.asp




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