Schools Pay Price of Broken Promises

January 29, 2019

It’s not just Boston’s sports teams that are famous. Within its city borders, Boston is home to many leading nonprofit institutions that are changing the world. However, breakthroughs in medical care and educational excellence comes with a very real cost. 

MassCOSH is part of the PILOT Action Group (PAG), a coalition of labor, faith, student, healthcare, and housing advocates who are raising the alarm that wealthy Boston nonprofits are paying less than their fair share of Payment in Lieu of Taxes program (PILOT) payments to the City of Boston. The voluntary program asks large nonprofits that rely on essential city services to pay 25 percent of their if-taxable property taxes. Even with a lowered rate, wealthy institutions are not fulfilling their obligation to the city, resulting in critical city services, such as education, going without funds that could improve the condition of school buildings badly in need of repair. 

Even with a 75 percent discount in their “bills,” these institutions have failed to pay over $60 million in pledged payments since the PILOT program in 2012. In Boston’s latest fiscal reporting year, only 27 percent of institutions kept their promise to provide the full amount of cash and community benefits requested under the arrangement. The city anticipated some $49.5 million in PILOT payments but only collected $32.4 million.  

“This may all seem very technical, but what it comes down to is that Boston is going without funds and needing to close down schools, operate in buildings that have unhealthy air quality, and, as these institutions physically expand, forcing the city to rely on a smaller and smaller group of taxpayers,” said MassCOSH Director of Policy and Programs Al Vega, who has helped lead PAG. 

MassCOSH is also working to address the public benefits area hospitals are required to provide as part of their nonprofit status and PILOT agreement, with a goal of seeing more of those investments going to support worker health and safety. A Robert Wood Johnson Foundation and the University of Wisconsin’s Population Health Institute report found that 40 percent of the factors contributing to length and quality of life are social and economic, such as employment type.   

With that in mind, the Massachusetts Department of Public Health has added work as one of the social determinates of health that hospitals can address with their community benefits programs. However, MassCOSH has found that hospitals have different program definitions and outcome measurements, making coordination and tracking of outcomes for workers very difficult.   

“We are involved in these two efforts because we believe that due to the large makeup of nonprofit institutions in our city, there is generally a smaller tax base from which crucial city services must be paid from, as well providing important municipal funds for budgets such as those for our public education system,” said Vega. “We have to be assertive and creative in how we raise awareness of these issues and also provide real solutions and strategies to figure out ways to reduce that inequality. We must ensure that these multimillion-dollar institutions are paying their fair share and providing actual community benefits through the programs and resources they all tout.”