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Should non-profits be non-contributors?

Posted by Ralph Ranalli October 18, 2007 08:39 AM

Newton's Brae Burn Country Club reported on 2006 tax forms it had assets of $21 million and income of $9 million.
(Globe file photo)


Call it municipal fantasy math. There's hardly an official of almost any suburb who has not cast a longing gaze at the campus of a tony private school or the expansive headquarters of a local social-service agency and wished that nonprofit organizations had to pay local taxes on the properties they own.

In Newton, it's a fantasy worth millions. In February, the city's Blue Ribbon Commission, a citizen advisory group, urged officials to confront its five local colleges with a combined assessed property value of $450 million, Globe West bureau chief Erica Noonan reports in today's edition. If Boston College, Lasell College, Mount Ida College, Andover Newton Theological School, and Hebrew College paid property taxes, the city would collect nearly $6 million annually, the commission found.

Framingham, meanwhile, has become the first community to take official action on the dream, formally requesting payments from more than a dozen tax-exempt social service agencies with local holdings. The town's actions are being closely watched in the nonprofit world, concerned that other host towns will attempt to strong-arm nonprofit educational, religious, and charitable institutions - none of which pay local property taxes - into donating payments in lieu of taxes, also known as PILOT arrangements.

Residents and officials alike have focused on affluent local institutions that, by virtue of their tax-exempt status, own properties but pay no real estate taxes. Names of well-heeled suburban educational institutions like Wellesley College and Boston College, both of which reported more than $1.5 billion in assets to the IRS in 2005, surface in discussion groups and letters to the editor when their host communities hit budget crises.

But nonprofits - poor and rich alike - cry foul, saying the payments would threaten their core missions to educate the young, help the needy, or minister to the faithful.

Read more about the tensions between non-profits and their municipal hosts in the online edition of today's Globe West.

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