December 22, 2010; Source: Boston Globe | Boston officials are not going to have an easy time selling a proposed plan that will require all tax exempt nonprofits to contribute for the cost of police, fire, and other municipal services.
Although the plan is meant to bring fairness to a patchwork system under which some tax exempt organizations currently make voluntary payments in lieu of property taxes and others pay nothing, objections are already coming from organizations that would see their payments rise along with those that would have to start kicking in for the first time.
In the hopes of raising millions of dollars more for its coffers, the city would charge the equivalent of 25 percent of what the affected organizations would owe in property taxes were they not exempt. According to the Boston Globe, half the money would be paid in cash and “the balance in good deeds, such as scholarships targeted for Boston students.”
The newspaper reports that additional revenue from large landholders—medical and educational institutions, for instance—could bring in $5 million in the first year, with more to come from museums and cultural groups. Right now, though, those are just paper dreams, as some nonprofits—including those already making voluntary contributions—are voicing firm opposition.
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Boston College, which already contributes about $300,000 toward municipal services, would see that amount rise six-fold. Says Jack Dunn, spokesperson, “We’re opposed to the principle. We do not want to forfeit the tax exempt status we have had since our founding and most importantly we feel we can make more meaningful contributions to the city in other ways.’’
Wheelock College, which doesn’t pay a dime now, isn’t buying into the plan to start with a $40,000 contribution and slowly watching that amount rise to $204,000 in annual payments over coming years. The college argues such payments would be burdensome to a school its size and “would have a direct impact on the services we provide to our students, including financial aid and student support services,’’ said Roy Schifilliti, a Wheelock vice president.
According to the Globe, many nonprofits maintain that “they bring greater good to the city that cannot be quantified on a spreadsheet.” Despite the opposition, some observers hope that because the city’s plan would ultimately require all organizations to pay at the same rate and the resulting system would be more open, public and peer pressure will ultimately get everyone to sign on.
As Daphne A. Kenyon of the Lincoln Institute of Land Policy notes, “if one institution like Boston University or Harvard steps up to the plate and increases their payments, there would be some guilt feelings on the part of nonprofits who have the ability to pay yet they are simply not paying.”—Bruce Trachtenberg