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Boston Asks Nonprofits To Shoulder Tax Burden24:59

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The Museum of Fine Arts could be asked to pay about $1 million to the city. (wallyg/Flickr)
The Museum of Fine Arts could be asked to pay about $1 million to the city. (wallyg/Flickr)

There's a growing and increasingly contentious debate about Boston's effort to compel its largest nonprofits — colleges, museums and hospitals — to pay more for city services.

Whatever you do, don't call it a tax. Because the state Constitution exempts nonprofits from most taxes, including real estate taxes. The thinking there — which dates back more than 200 years — is that these organizations perform good works that would otherwise fall to government.

Instead, the city calls it a payment in lieu of taxes, or a "PILOT." Most nonprofits have been making voluntary PILOT payments for years. But faced with a stubborn recession and declining tax receipts, Boston is asking its largest nonprofits to increase those payments in a big way, from roughly $15 million this year to almost $50 million within five years.

This sets up a pretty contentious debate. On one side, there are folks who point out that more than half of the city's land is owned by nonprofits and Boston simply can't afford not to collect taxes on all that real estate.

On the other side, opponents say this is nothing less than a short-sighted Orwellian effort to shame nonprofits into forking over more dough. They say it's only a matter of time before the city imposes this, well, tax on all nonprofits.


This segment aired on June 1, 2011.

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