By David Riley | The MetroWest Daily News
With some cash-strapped cities and towns pressing tax-exempt organizations to do more to support local services, a statewide network of some 640 nonprofits is asking members what they think of making payments to local governments.
The Massachusetts Nonprofit Network, led by former state senator and Framingham resident David Magnani, sent members a survey yesterday on voluntary payment-in-lieu-of-taxes, or PILOT, programs.
Debate has long simmered locally and statewide on whether religious and educational institutions, social service agencies, certain health care providers and other nonprofits should somehow make up for the local property taxes they do not have to pay.
Magnani said the survey was spurred by discussion among Boston officials on asking tax-exempt organizations to increase PILOT payments to a set percentage of the amount they would owe if they paid taxes. Other cities around the country are watching what Boston does, he said.
“We wanted to get our oar in the water before a final decision is made,” he said.
Magnani also noted reports that Concord officials also have asked nonprofits to contribute more.
The nonprofit network’s board has not yet taken a position on the matter, Magnani said. It wants to hear which of its members make PILOT payments, how much they pay if so, and what they think about the way such arrangements should be handled.
Magnani’s network does not include large universities or hospitals.
While Magnani said the issue is more complex than it may seem at first blush, nonprofits understand the pressure that cities and towns are facing.
“It’s no question at all that they’re struggling,” he said.
The network’s survey had already netted about 70 responses early yesterday afternoon, but Magnani said they had not yet been reviewed.
PILOT payments have been a particularly controversial subject in Framingham, which is home to a number of nonprofit social services agencies and other tax-exempt properties. Town Meeting established a PILOT Study Committee in 2005 to look into the matter.
While some municipalities see a need for nonprofits to help support fire, police and other services from which they also benefit, Magnani said tax-exempt organizations think the subject of PILOTs raises plenty of questions.
Susan Nicholl, chairwoman of the MetroWest Nonprofit Network, said it’s important to consider non-monetary ways that nonprofits contribute to towns, and the cost if tax-exempt organizations did not meet those needs.
“Nonprofit organizations that clean up our rivers, raise funds for our schools, offer art classes and concerts, or build affordable housing all contribute to the quality of life in MetroWest,” she said.
Magnani said if cities request PILOT payments based on a set percentage of property value, paying for it could be complicated.
Many nonprofits receive funding from foundations and other sources that, by tax law, the organization must show went toward its mission, he said.
“The question becomes where does the money come from, and how does it further the mission?” Magnani said.
While such payments are voluntary, Magnani said PILOTS also raise questions of whether nonprofits would receive special treatment if they paid more.
Magnani said towns and nonprofits may be able to work together to come to a solution.
“We think that’s a better partnership than what might result from this movement toward a fixed PILOT,” he said.
(David Riley can be reached at 508-626-3919 or driley@cnc.com.)
