Mr. Pease’s recent letter to regarding the PILOT (payment in lieu of taxes) issue is timely given the recent financial management review update that was completed by the Massachusetts Department of Revenue’s, Division of Local Services. The report, which is available on the town’s website, recommends pursuing with the tax exempt entities in town a formula that address the expense incurred in the provision of municipal services and would be a predictable source of revenue (Item 8 on page 11. — Ed.). This recommendation was also made in the DLS report that was conducted in 2004 and laid the basis for the work of the Blue Ribbon Governance Committee which led to the town adopting the charter in 2008.
It would be inaccurate to assume this issue has not been pursued, but absent the underlying legislative support for PILOT formulas the best we are left with are ‘gentlemen’s agreements.” Our former State Representative, Bob Hargraves, can tell some interesting stories about the time he filed legislation to compel private schools to continue paying the property tax on residences they purchased for faculty housing or noneducational purposes. The bill was actually gaining some traction until the larger colleges in the Boston area became aware of it and killed it through intense lobbying (an informal agreement was reached with the Groton School who continue to pay amounts equal to the assessed property tax on residences they acquire). It would be nice if current legislation was more productive, but it is more than likely the same interests will view any such legislation as being akin to the ‘camels nose getting under the tent’ and will oppose it vociferously.
This does not mean the PILOT issue is a lost cause however, and the Selectmen are following up on the DLS recommendation and approaching the private institutions in town that benefit from municipal services. School services for the dependents of faculty staff are a major component of town services provided to some private institutions and it must be addressed, particularly in light of the financial crisis our school district is in. Current PILOT payments by those institutions do not cover this expense. There are also ways to approach this issue with some of the other tax exempt entities and some good examples exist where municipal light departments agree to pay a percentage of their revenues to their towns. Of course those revenues can be impacted by the current volatility of the energy market, but it is a good starting point for a conversation.
The PILOT issue is indeed a timely one and one that is being pursued currently. At its core it is a matter of fairness and good public policy given the fiscal dynamics which face Groton.
Peter S. Cunningham