Somerville needs a payments in-lieu of taxes (PILOT) program

 |  Written by Katjana  |  0
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Somerville needs a regular, open process to negotiate voluntary payments in-lieu of taxes (PILOTs), with our local multi-million dollar, non-profit institutions, so that these institutions pay their fair share for city services like police and fire departments, even snow removal.

Somerville is fortunate to be the home of several vibrant university, health care and other large multi-million & billion dollar, non-profit institutions. These institutions do bring remarkable benefits to our city; they help drive our local economy by bringing people, jobs and prestige to Somerville. I hope and expect that we will continue to attract more of the same kind of excellent institutions that already call Somerville their home.

However a counter-point to the many benefits that these very large, non-profit institutions bring to Somerville is that these institutions use city services; such as policing, fire protection, and infrastructure, including roads and utilities, without paying the same kind of regular assessments that our local businesses and home-owners are required to pay. The economic benefits provided by local institutions are shared by the Commonwealth, the whole northeast region and the country, but the cost of local services is primarily our responsibility to pay here in Somerville.

Large, local non-profits own property that is removed from our tax base and from the local real estate market, so we lose the taxes for their properties and the supply of commercial space and housing units is reduced. As a result space for Somerville businesses and homes for Somerville families become ever more expensive.

When I look at the revenues, the tax-exempt property holdings and endowments of these large non-profits, I have to ask, why should Somerville home owners and Somerville small business owners be the only ones regularly assessed to pay for the services that we all use? I think that it is only reasonable for Somerville to request, that payments in-lieu of taxes be negotiated openly and regularly with the institutions that can clearly afford to pay their fair share, just as often as we are all assessed to pay taxes.

As Alderman I propose that Somerville implement a PILOT Program, to promote regular communication and partnership between the City and major, local non-profit institutions. Through our PILOT Program Somerville will establish the criteria for participation by institutions, and the fair value for city services provided to tax-exempt property owners, as well as the value of exempt properties and lost tax revenues. Credits for community partnership and economic benefits provided by the institutions will also be evaluated, and a fair value for voluntary PILOTs will be negotiated and suggested. We all benefit from being located here, together in the terrific City of Somerville. We should all talk regularly and openly about how to share the cost of paying for the benefits that we all use.

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