Tax-exempt only in name
“Fairness” is one of the most abused words in politics.
And it is taking a beating again by the City of Boston, in its quest to find yet another way – any way – to avoid controlling its spending.
Nonprofits aren’t a new target – they have been a target for decades. Legally, they are exempt from property taxes. But municipal officials throughout the state have for years been “asking” them to “contribute” a PILOT – payment in lieu of taxes – to cover the cost of whatever government services might be provided to them. You know, as a matter of fairness.
These “requests” are a bit like Don Corleone making someone an offer he can’t refuse. If a standard guilt trip doesn’t work, the university, the medical center, the museum, the charity are told in not-so-veiled terms that if they don’t pay up, good luck the next time they come before a city board seeking a permit.
It is extortion, all prettied up as fairness and good citizenship.
And now, as the Boston Globe reports, Boston is taking it to the next level, “asking” its major nonprofits to make PILOTs of up to 25 percent of the assessed value of their properties.
This, according to Mayor Tom Menino, is for, what else? – “fairness for Boston taxpayers and the nonprofits.”
Apparently this is just fine with the heads of some institutions like Boston University President Robert A. Brown and Eric Buehrens, interim president and chief executive officer at Beth Israel Deaconess Medical Center, who both say they will comply.
But then, some are less enthused:
Other nonprofit leaders, however, expressed reservations — or declined comment — not only because of the increased cash contributions suggested by the city, but also because of concern that participating in a plan that calls for making payments based on a percentage of property values might set a precedent that could eventually compromise the tax-exempt status of their institutions.
Gee, you think?
City officials, who hope to ramp up their take from these institutions from $15 million a year to $40 million, make a big deal of the fact that this is all still well below what they’d have to pay if they weren’t tax exempt.
But that’s a diversion. The point is that they are tax exempt, for very sound reasons. According to the law, they should not be paying the $15 million, never mind $40 million.
If municipal officials think those institutions should no longer be tax exempt, be up front about it. If it’s not fair that the law exempts them from paying taxes, then move to change the law. File home-rule petitions. State legislators will be sympathetic – they don’t want to control spending any more than you do.
“Tax-exempt” is already a fiction. It’s time to be honest about it.
