Report: PILOTs No Budget Boon for Strapped Local Governments

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September 28, 2012; Source: Reuters

deAccording to a recent study by the Lincoln Institute of Land Policy, at least 218 localities in at least 28 states have received payments in lieu of taxes (PILOTs) since 2000 and those payments are worth a total of more than $92 million annually, but that still covers only 0.13 percent of the city budgets in question. The Institute concludes that PILOTs “will never be a panacea for cash-strapped governments…They simply do not generate enough revenue.” NPQ has suggested that this report may be a helpful data point in ongoing local debates about PILOTs.

However, the revenue, albeit small, would be welcome, add the researchers, and useful in these cash-strapped times for local governments. The researchers suggested that PILOTs could also strengthen the relationship between the nonprofits and their hometowns.

The report found that almost 80 percent of the PILOT programs in the U.S. were concentrated in the Northeast, with a lion’s share in Massachusetts and Pennsylvania. Most of this comes from universities and hospitals, and according to the report, a small number of multimillion-dollar PILOT payments make up most of the revenue received nationwide. –Ruth McCambridge