| Sept 28
Sept 28 Hopes that large payments by nonprofits
could fatten lean local budgets, such as that announced by Brown
University, do not fully achieve the desired results, according
to a report on Friday.
As struggling cities seek new sources of revenues, voluntary
payments by private colleges, hospitals and others to their
hometowns make up only 0.13 percent of general revenue, the
Lincoln Institute of Land Policy said in the report.
The local governments are putting pressure on the big
nonprofits within their borders to help defray costs for
providing police, fire and sanitation services.
The payments, which nonprofits sometimes agree to pay
because they are exempt from property taxes "will never be a
panacea for cash-strapped governments," the institute said.
"They simply do not generate enough revenue."
Even so, the payments can provide useful funding to towns
and can benefit the nonprofits by strengthening relationships
with their hometowns, the researchers said.
Lincoln found that at least 218 localities in at least 28
states have received the payments in lieu of taxes, or PILOTs,
since 2000. The payments are worth more than $92 million
The report, the most comprehensive known compilation of
PILOT payment data, is the first update of a study Lincoln
published in 2010, when it found that at least 117
municipalities in at least 18 states had used PILOTs.
The increase in number is not necessarily evidence that more
cities are collecting PILOTs, because the survey used an
expanded methodology and reached more municipalities in its
update, Lincoln researchers said.
RELATIONS WITH NONPROFITS
Cities across the United States have come under increasing
budgetary pressure because of shrinking tax revenue collections,
cuts in state aid and other factors.
Some have made high-profile moves recently to get more money
from major institutions.
In Providence, Rhode Island, Mayor Angel Taveras got several
of the city's major nonprofit institutions to boost their
payments, announcing on May 1 that Brown University would double
its annual voluntary contribution to nearly $8 million for five
And Boston, home to one of the largest networks of colleges
and universities, has implemented what Lincoln said was the
"most comprehensive" PILOT program in the nation.
Lincoln used data from its 2011 survey of local government
officials in 599 jurisdictions, it said. The report, which
didn't examine payments from public entities or for-profit
companies, found that nearly 80 percent of PILOT programs
nationwide were concentrated in the Northeast, with the biggest
share in Massachusetts and Pennsylvania.
The vast majority of PILOT revenue comes from universities
and hospitals, rather than from smaller charities and other
nonprofits and a handful of multimillion-dollar PILOT payments
account for most of the revenue received nationwide, Lincoln