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Boston tries asking nicely for more taxes
The John Hancock Tower sits in the heart of the Back Bay neighborhood in Boston, Mass.
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Kai Ryssdal: Nonprofits in this country enjoy a special privilege under the tax code. As in, they don't have to pay. Tax-exempt is the official phrase.
But with city budgets stretched ever thinner, it may be a dwindling perk. Boston is asking some of of its nonprofits, universities, hospitals and museums to bear more of the cost of city services.
From the Marketplace Education Desk at WYPR in Baltimore, Amy Scott reports.
Amy Scott: Boston is covered with colleges and hospitals: Harvard, BU, Mass General. More than half the property in the city is exempt from taxes.
Starting this summer, Boston will ask many of those institutions to pay up to quarter of the property taxes they would pay if they weren't tax-exempt.
Ron Rackow is commissioner of the Boston Assessing Department. He says property taxes cover more than 60 percent of the city's budget.
Ron Rackow: So when you have a large percentage of that property base that's exempt, it puts a lot of pressure on the remaining businesses and residents to pay for services.
So-called payments-in-lieu-of-taxes are fairly common. Many of Boston's nonprofits already make voluntary payments to offset the cost of city services.
Greg Ingram heads the Lincoln Institute of Land Policy. He says universities have some good reasons to pay.
Greg Ingram: They're very concerned about the security of their staff and their students; they're concerned about the sort of general ambience of the neighborhood.
Some worry the idea will catch on in other cities. Tim Delaney is president of the National Council of Nonprofits. He says nonprofit budgets have been hit just as hard as city budgets.
Tim Delaney: So by having policymakers now turn to nonprofits saying "give us money," is just going a bridge too far.
The payments are still voluntary. To encourage cooperation, the city plans to publicize how much each nonprofit has been asked to pay, and how much it coughs up.
I'm Amy Scott for Marketplace.
-Mary-
I live in Boston and I suspect would be called a "liberal". This practice has been in place for a long time in neighboring Cambridge, Harvard and MIT make voluntary payments to the city annually. The article attributes them to Boston, they are on the other side of the river. Boston has a massive number of institutions, which is what makes it so great, and that their lack of contribution gets expensive. I don't dispute that I may see a higher ticket price at the MOS, MOFA or even Children's Hospital, but these are in fact services, services that improve the world we live in. Is it crazy to say they should contribute? I don't think so. I think we'll see in the end, that these institutions will make payments, as they, like *liberals* are often forward thinking with the focus on the greater good. There is a bakery called "When Pigs Fly", maybe you're already late to the game.
"The city is asking tax-exempt institutions like universities and hospitals to voluntarily pay more property taxes."
Boston is one of the most liberal cities in America, and liberals are always insisting that we need to pay higher taxes. Surely they will jump at the chance to pay more. Ha! When pigs fly.
Ultimately, cities like Boston that are slowly going bankrupt will strip them of their tax-exempt status ... and the hospitals and universities will pass taxes along to their customers.
