Boston Municipal Research Bureau 'Update' Has Me Thinking Thoughts of PILOTS

Monday, October 23, 2017

I always thought that hospitals and universities owned most of the tax-exempt land in the City of Boston.  Boy was I mistaken.

The total area of Boston consists of 47.84 square miles.  Of that total, 49 percent, or 23.44 square miles is tax-exempt.  And of those 23.44 tax-exempt square miles, only 4.98 square miles are owned by institutions devoted to medicine and health care, higher education, cultural pursuits and worship (churches, synagogues, mosques), etc.  The rest is mainly owned by the government.
I got this information from the latest (10-3-17) “Bureau Update” from the Boston Municipal Research Bureau, an independent organization that’s been keeping tabs on Boston’s finances since 1932.  Thank you, BMRB.

Here are some other things I gleaned:
  • The state government owns 48.5% of all the tax-exempt land in the city.
  • The city and federal governments own, respectively, 28.6%  and 1.6% of all the tax-exempt land.
  • The total assessed value of all the property in Boston is $190.3 billion.
  • Of all the property in Boston, the value of the taxable property is $138.1 billion, whereas the value of all of the tax-exempt property is $52.2 billion. (That’s a 72.6 to 27.4 percentage split.)
Many large owners of tax-exempt property in Boston make annual payments in lieu of taxes (PILOTS) to the city.

Every once in a while, an elected official at the local or state level will complain that PILOTS to Boston are way too small.  They will demand that the largest non-profits, for example, Massachusetts General Hospital, increase their PILOTS substantially; or, they will call upon the legislature to pass a bill stripping them of their tax-exempt status altogether. 
After a bit of media coverage, the issue dies down without anything having changed.

The City of Boston is doing very well today, so much so that its bid to be the second headquarters of Amazon is seriously considered as one of the two or three strongest in a nationwide competition.
Boston’s economy is really cranking and the city today is a far wealthier place than it was 25 (never mind 50) years ago.  To those of us who grew up in this area during the Fifties and Sixties, there is an almost OZ-like quality to Boston’s current wealth, appeal, confidence and national standing. 

I’m no economist.  But given how well Boston is doing, and given how much its hospitals, medical research centers, universities and cultural institutions contribute to the city’s success and appeal, I’d say there’s no case for increasing PILOTS or eliminating anyone’s tax-exempt status. The whole mix of property uses and tax categories in Boston, as old and idiosyncratic as it may be, seems to be working just fine.

You can find the complete update at:

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