The City of Portland is expected to reopen discussion of implementing a Payment-in-Lieu of Taxes (PILOT) program in order to extract revenue from tax exempt property owners, such as hospitals, universities, nonprofit organizations and churches.
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The Portland City Council’s Finance Committee will discuss the development of a PILOT policy at their meeting this Tuesday, though will not take any action on implementing the policy at the meeting.
PILOT refers to payments made to governments in the place of property taxes meant to pull revenue from tax exempt organizations.
The federal government instituted a Payment in Lieu of Taxes program in 1977 aimed at helping local governments offset losses in property taxes due to nontaxable federal lands within their boundaries.
By law, any agreement entered into by a tax exempt organization to make payments under a PILOT program is required to be voluntary.
In 2017, the Portland City Council’s Housing and Economic Development Committee began working on a draft PILOT policy that included an exemption for smaller nonprofits with property evaluated at under $2 million, and a “Services in Lieu of Taxes” component.
Although a PILOT policy was never finalized, the city currently sends formal requests for PILOT payments to certain nonprofit organizations annually, and negotiates payment agreements with smaller tax exempt property owners on a case-by-case basis.
The city looked to Boston as an example of implementing a PILOT program, which has been collecting payments from tax exempt property owners since fiscal year 2012.
In 2023, the City of Boston collected nearly $36 million in PILOT payments from educational, medical and cultural tax exempt organizations.
Development of an official city PILOT policy was designated as one of the Finance Committee’s 2024 goals in June.
According to a memo from City Councilor Kate Sykes, a PILOT program would allow the city to shift more of the tax burden off of the city’s tax payers and onto large tax exempt nonprofit property holders.
A prime example of a potential PILOT target is MaineHealth. The nonprofit hospital operator has a reported $3.7bn in assets and owns large parts of Portland.
“Portland’s many non-profit institutions offer a wealth of educational, cultural, social, and medical services that draw visitors, students, workers, and residents to our city from all over the world,” Skyes wrote in her memo.
“These nonprofits are exempt from property taxes, but they benefit from a variety of
public services provided by the City of Portland, such as fire, police, and public works,” she wrote. “While nonprofits serve many people who live outside of Portland, the cost of their property tax exemption is borne locally by Portland taxpayers.”
At their meeting this Tuesday, the Finance Committee is set to discuss various aspects of a potential PILOT program, including at what property value to set an exemption threshold for smaller nonprofits, how to phase in the program, and the setting of multiple public hearings to get feedback from exempt entities on the propoal.
<span class="dsq-postid" data-dsqidentifier="30020 https://www.themainewire.com/?p=30020">8 Comments
Maine Med has taken hundreds of properties off the taxpayer rolls.
They have made so much money they’ve become real estate investors.
They’re supposed to be a non profit but like a lot of non profits, Rachel Talbot Ross, they are out of control.
Because if city raised taxes to support their socialist programs the voters would fire them. This way the higher cost will be passed on by the non profits making them the bad guys. Soon medical costs will skyrocket and that’s when the libs will try to save you with socialized healthcare. Wake up people.
Non Profits……Leeches …..Just remember this …..Kamala WANTS socialized medical care .Medicare for all . NO PRIVATE HEALTH CARE . Canada will be the gleaming example that she will use . If this idiot is elected we , as a country will be destroyed .
Only way Portland can keep spending on “asylum seekers”
@beachmon, Maine Med itself is a non-profit. However Maine health isn’t. One of them does own like every building on Gilman street down to that mini mall on St Johns. However if its Maine Health then they still have to pay taxes.
Taxes are always passed on to the consumer. Therefore it is you who pay.
It is now difficult to fly out of PWM, non stop, to much of anywhere. Fortunately I 95 bends out around down town Portland so that I do not have to drive thru it on my way to Logan. What was an interesting city fifty years ago in rapidly sliding down into a best-avoided socialist swamp.
Don’t we all despise the words “Fair Share” by now?
Many nonprofits, especially the smaller ones, are rampant with fraud. The larger ones such as hospitals and universities are scam fests that receive government subsidies.
Ex., how much money did ME Med or Northern Light receive in bonuses from the CDC for treating Covid patients with Remdesivir, intubating them and then claiming they died from Covid on their death certificates? The short answer is $millions. Barbara Bush Children’s Hospital provides sexual mutilation surgeries. Should they keep their nonprofit status?
Generally, I’m not in favor of a city council excessively taxing businesses because they can’t manage their finances. However, the money for illegals has to come from somewhere. Political hacks create the problems that didn’t previously exist and then put the taxpayers on the hook to fix them. The best solution would be to elect fiscally conservative politicians but that will never happen in Portland, ME.