Boston Non-Profits Should Have Larger In-Lieu-of-Tax Payments

Boston, like many cities that serve as a regional cultural hub, has a lot of property owned by non-profits. And all of that property is untaxed. How much? The Back Bay Sun notes:

The exemptions began with church properties, spread to hospitals and learning institutions, then to museums.

The combined value of Boston's nonprofit properties is $13.6 billion, according to the Boston Assessing Department.

If those properties were not exempt their tax bill would be $404 million.

In lieu of tax payments have been rising as the nonprofits reluctantly come to understand that for all the advantages of having them here in Boston, they, too, need make a contribution.

In lieu of tax payments for 2011 totaled $15 million.

Nineteen major medical, educational, and cultural institutions paid not one dime to the city in 2011.

This included Massachusetts Eye and Ear, Simmons College and Massachusetts College of Pharmacy and WGBH and the Museum of Science among many others.

Keep in mind that Boston's entire budget is ~$2.5 billion, so this is hardly an inconsequential shortfall.

It's also unfair to smaller non-profits that are unable to own their property. Non-profits that rent end up having the landlord's taxes included in the cost of their rents, while non-profits that are able to own don't have to pay the property tax (either directly or indirectly).

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Over here on the other side of the river in Cambridge, our Large Educational Institutions pay a significant amount to the city; MIT is the city's largest taxpayer. It's in their interests to have good city services maintained, and they own a pretty sizable chunk of the local real estate.

For once I agree with you. Non-profit organizations are a problem. I believe the solution is in the definition of a not-for-profit organization. Many churches no longer provide community based benefits. Many universities have transitioned from teaching to research. These are but two of many examples of not-for-profit entities taking advantage of local largess when they no longer provide the benefits that initially earned those for them.

By Rick Stiles (not verified) on 01 May 2011 #permalink

Over here on the other side of the river in Cambridge, our Large Educational Institutions pay a significant amount to the city; MIT is the city's largest taxpayer. It's in their interests to have good city services maintained, and they own a pretty sizable chunk of the local real estate.
thank antalyahotel