Menino to nonprofits: Pay up!

alex beam

City’s Payments in Lieu of Taxes program has MFA and other arts and education institutions asking questions

October 28, 2011|By Alex Beam, Globe Columnist

I was on my way to dinner last week when I stopped in on Museum of Fine Arts director Malcolm Rogers’s Lowell Lecture at the Boston Public Library. It was an interesting presentation, sadly underattended. The talk warmed up about halfway through when Rogers started griping about the city’s “lack of vision’’ where the MFA’s finances were concerned. Specifically, Rogers was venting about Boston’s unsubtle tax shakedown directed against nonprofits, called the PILOT program, for Payments in Lieu of Taxes.

I bearded Rogers after his talk, expecting him to back off his tough rhetoric. But he stayed steamed, in a buttoned-down English way. The city had just jacked up his annual PILOT payment from $66,000 to $250,000, and was planning to tag him for a cool million down the road. The veiled threat to nonpayers is that the traffic light outside the main entrance won’t get fixed, or the key side street leading to the staff garage won’t be plowed, and so on.

The MFA is a huge economic driver in Boston, Rogers observed, and then invoked the examples of New York City and Los Angeles, both of which subsidize their major art museums - the Met and the LA County Museum of Art - with over $25 million a year. That’s right, says New York’s Department of Cultural Affairs spokeswoman Danai Pointer: “The city recognizes that the arts play an important role in the distinct identity of all the boroughs, and make an important contribution to tourism and the economy.’’

Ouch.

Boston has been exacting the “voluntary’’ PILOT payments from nonprofits for quite a while, with the big universities and the hospitals bearing the brunt of Mayor Tom Menino’s tough love. The rationale isn’t hard to understand. The city delivers services, such as fire and police protection, and street maintenance, to the nonprofits for free. As charities, they are exempt from taxes. Boston has less dough than ever, so it has been jacking up the PILOT payments accordingly.

The nonprofits have been complaining that Menino exacts tribute on an arbitrary basis, with City Hall darlings such as Northeastern University and Suffolk University paying less, and the big players, such as Harvard and Boston University, paying more. If you look at some of the gobbledygook posted at Cityofboston.gov, that’s not exactly true. The current formula tries to ape a conventional property tax. If you put an addition on your house, its value increases and your property tax goes up.