PILOTS: “Not Appropriate for All Communities”

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February 26, 2013; Source: Berkshire Eagle

With a population of around 44,000, Pittsfield, Mass. is the county seat of Berkshire County, not far from the Massachusetts/New York border. A 10-member study group in Pittsfield is examining whether nonprofits should be asked to provide “regular donations” to support local government functions. But, as it turns out, few nonprofits in Berkshire County, where Pittsfield is the largest city, are likely good candidates to be tapped for PILOTs.

A presentation to the study group by Michael Supranowicz, president of the Berkshire Chamber of Commerce, revealed that “there are more than 1,100 nonprofit entities in the county, but only 703 are defined as charitable nonprofits under state law, and of those only 347 have income of more than $25,000 annually, requiring them to file an IRS Form 990 tax report.” He also reported that only 17.9 percent of the county’s land parcels are owned by nonprofits (presumably an analysis that combines land owned by charitable nonprofits with land owned by religious institutions). Compare that to Boston, the PILOT nirvana where nonprofits or churches own more than half of the city’s geography. Supranowicz suggested that perhaps “structured PILOT programs are not appropriate for all communities.”

It was the discovery of the Boston PILOT program that got two Pittsfield City Council members to suggest that the western Massachusetts city do a study like Boston’s to come up with a “voluntary” nonprofit contribution formula to support local government. But as the study group has found, what works in Boston might not work in Pittsfield, given its limited number of nonprofit candidates for PILOTs and the small amount of property that they own.

In addition, another member of the study group raised questions about what kind of operating margins they might have and whether the nonprofits would be capable of absorbing a municipal request for financial support. For some communities all agog about their potential replication of Boston’s PILOT program, the effort to exact a “voluntary” tax payment from nonprofit property owners might be like trying to get blood from a rock. —Rick Cohen