A Different Approach to...

A Different Approach to PILOTs

Full and original article posted on Nonprofit Quarterly

Most newspaper coverage of the issue of payments in lieu of taxes (PILOTs) applied to tax-exempt property owners reads like a boxing match: round after round of punches and parries about how much nonprofits cost a city in lost revenues, how much nonprofits contribute outside of paying property taxes, and so on. This article from Worcester, Mass. is different in the depth of its analysis, drawing on a report from the Worcester Regional Research Bureau (WRRB).

Several WRRB observations are very useful in this piece. Tax-exempts account for 21 percent of Worcester’s property tax base, higher than the state average of 12.8 percent, but Steve Eide, a WRRB senior research associate, noted that “the percentage of tax exempt properties doesn’t seem to be a good predictor of the overall health of the local economy…I think the typical back-and-forth is not very helpful. You may have a good economy or a bad economy with a high percentage of tax exempt properties.”

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