Boston wanted tax-exempt institutions to chip in more to help pay for city services. Under Trump, it's looking unlikely.

Boston Globe

3 days ago

Recently, however,
President Trump's siege on grants and other federal funding vital to many of those same institutions
has scrambled
those plans.
'We are continuing to have productive discussions with our institutional partners and believe that short term progress is possible, but the unprecedented attacks on higher education, research and healthcare and instability from the Trump Administration is clearly a major factor' in those negotiations, city spokesperson Emma Pettit said in a statement.
At issue is Boston's voluntary
For years,
the program, and increase pressure on nonprofits to contribute more cash.
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Top City Hall aides said the city is still committed to updating the program in the future. But in the current political environment, the city doesn't have the leverage to implement major changes, they argue.
Harvard alone has already suffered
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The city's
These institutions form critical pillars of many of Boston's core industries, City Hall aides said, and attacks on them
With larger threats and forces at play, it makes more sense for the city to ask for PILOT contributions that are consistent with previous years', officials say, rather than pressuring tax-exempt institutions to make significantly larger payments when many are already facing daunting financial challenges.
Now is the time for a united front, agreed Patricia McMullin, executive director of the
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'Hospitals are bracing for the uncertainty and the potential for catastrophic cuts while simultaneously working to prevent that,' McMullin said, emphasizing that hospitals have been some of the most generous participants in the PILOT program, even through 'unprecedented' financial challenges after the pandemic.
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But the grassroots advocates who have pushed for changes to PILOT for nearly 10 years want the city to keep up the pressure.
Now is 'not the time to take your foot off the gas,' said Enid Eckstein, co-chair of the Boston grassroots organization
'It's reprehensible what the Trump administration is trying to do to universities and to healthcare funding, and I recognize that this is a treacherous environment,' she continued. 'But at the same time, I believe that some of these institutions have an incredible amount of money in their endowment, and that these cities, they [also] operate under a challenge right now financially.'
More than
In Boston, about 52 percent of all land in the city is tax-exempt, according to a
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If the property owned by PILOT-participating nonprofits were taxable, city coffers could have seen roughly $500 million in additional revenue last
fiscal year.
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The PILOT formula implemented in 2011 tries to partially offset that gap. Under the current system, the city asks institutions to contribute 25 percent of what they might've owed if they weren't tax exempt. Half of that the city requests in cash, and nonprofits can fulfill the other half by providing evidence of 'community benefits,' which can be anything from free health care services to tuition assistance or cultural programs.
Eckstein said her group has pushed for changes, including incorporating updated property valuations into the PILOT formula. PILOT contributions in most cases are calculated based on property tax rates from the 2011 fiscal year, and property valuations from 2009, which are assumed to be far lower than what that real estate is worth today. The city re-assessed the property values of tax-exempt real estate in the last couple of years, but has not applied those new valuations to the PILOT formula, said Boston City Councilor Liz Breadon, who chairs the council's PILOT committee.
Eckstein said her group also wants the city to standardize the community benefits program, so the city and nonprofits can coordinate and better
direct resources to the most urgent needs. They also want those changes to be made with community input.
Getting tax-exempt institutions to pay more, even in good times, is easier said than done. Because the city does not have the authority to force institutions to fulfill their full PILOT obligation, the program is entirely voluntary. While some nonprofits consistently pay most, if not all, of their requested contribution, others pay little or nothing at all.
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Breadon said it's a balancing act for the city to negotiate higher payments in the future, while also maintaining good relationships with the institutions.
PILOT 'is voluntary, so they could just say, 'Oh, we're done, goodbye, we're not paying anything,'' Breadon said. '[So] it's an ongoing conversation right now, and we haven't landed on the compromise that works for everyone yet.'
Since the program's inception, the city has never received 100 percent of the total it's asked for from all PILOT qualifying nonprofits. The most recent data from the 2024 fiscal year shows that the city received 76 percent of the nearly $129 million in requested PILOT payments, about $35 million of it in cash. That only funds a tiny fraction of the city's
Still, Breadon and City Hall aides said that doesn't mean they're letting nonprofits off the hook.
'Our expectations of our residents is that they'll continue to pay their real estate taxes, and our expectation of our institutions is that they will also continue to meet their commitment to PILOT even though it's a voluntary agreement,' said Breadon. 'We certainly have a lot of sympathy, but we also realize that we need their contribution[s], especially in this difficult time.'
Niki Griswold can be reached at