The Herald has learned the Wu administration is negotiating with nine of the biggest nonprofits in Boston to ink long-term volunteer PILOT payments to help ease the tax burden on homeowners and businesses.
Once most of those deals are secured with the “Big 9,” other tax-exempt institutions in the city are expected to fall like dominoes.
The timing is critical as Mayor Michelle Wu won City Council support Wednesday for her compromise tax classification split that puts more pressure on the commercial sector. That 12-1 decision now heads to the state Legislature for a vote.
The Wu administration is targeting Harvard University, Northeastern University, Boston University, Boston College, Mass General-Brigham Hospital, Beth Israel Hospital, Boston Children’s Hospital, Dana Farber Cancer Institute, and Tufts Medical as the nine cash cows.
“We continue to give Harvard, Northeastern, all these institutions a pass,” at-large Councilor Julia Mejia said at yesterday’s council meeting. “At some point, the city is going to have to say you’re going to have to pay if you’re going to do business in the city of Boston.”
The city is attempting to update the Payment in Lieu of Taxes (PILOT) agreements with multi-year commitments that grow cash contributions that give budget writers more predictability, the Herald learned.
The key is having the Harvards and Northeasterns, to name two top players, lead the way and set an example for others.
Under the PILOT program, private institutions, which mainly consist of colleges, hospitals and cultural centers with tax-exempt property in excess of $15 million, make voluntary payments amounting to roughly 25% of what they would have paid in real estate taxes, as the Herald has reported this week.
That deal was ironed out in 2012 by then-Mayor Thomas Menino. A lot has transpired since then.
The Wu administration is aiming to reboot the PILOT program with new extended commitments by early in the New Year.
However, BC told the Herald the college will not take part in the PILOT program in any form.
“As a non-profit educational institution and a religious affiliate, Boston College chooses not to participate in the voluntary PILOT program so as not to relinquish the tax-exempt status afforded to educational and religious entities,” BC spokesman Jack Dunn told the Herald in an email Tuesday.
It’s too soon to say if BC will go along if others look to pay their fair share for city services they have always received.