Andover Townsman, Andover, MA

News

January 2, 2014

Private schools may face tax

Town pursuing payments from nonprofit institutions

(Continued)

Nobody could be reached from Merrimack College or Mass. School of Law.

Andover is not alone in seeking payments in lieu of taxes from nonprofits, particularly schools.

Many communities are seeking contributions from large nonprofits as municipal budgets are squeezed.

Salem, for example, negotiated payments from Peabody Essex Museum, Salem State University and Northeast Animal Shelter when those nonprofits purchased formerly commercial properties that would have been lost to the tax rolls.

In Danvers, selectmen are considering charging St. John’s Prep a payment in lieu of taxes, noting that the school is a large landholder.

Danvers already has PILOT agreements with the owners of two large medical facilities. Partners Healthcare, which owns the Mass General/North Shore Center for Outpatient Care on Endicott Street, paid the town $93,249 last fiscal year. And Northeast Hospital Corp. paid Danvers $37,324 for its Lahey Outpatient Center on Maple Street.

Communities like Boston, Cambridge and Brookline have PILOT policies with formulas to figure out what a nonprofit entity should contribute based on its demand for services. In most cases, it works out to be 25 cents on the dollar, although such agreements are strictly voluntary.

In fact, Boston brings in about $66 million in payments from nonprofits, including private universities. Cambridge brings in $5.3 million.

Taxing proposal

Under a new policy approved recently by the Board of Selectmen, private, nonprofit schools with property values of more than $4 million would be charged a fee based on 25 percent of what their tax bills would be if they were for-profit entities.

The payment in lieu of taxes, or PILOT, would be negotiated between the town and the individual school, with the amount dropping based on quantifiable services the educational institution provides the community.

PHILLIPS ACADEMY

Assessed value: $193,752,100

Taxes at full value: $2.8 million

Proposed payment: $702,000

MERRIMACK COLLEGE

Assessed value: $28,726,300

Taxes at full value: $416,819

Proposed payment: $104,204

PIKE SCHOOL

Assessed value: $10,695,700

Taxes at full value: $155,195

Proposed payment: $38,798

MASS. SCHOOL OF LAW

Assessed value: $7,559,000

Taxes at full value: $109,681

Proposed payment: $27,420

MELMARK SCHOOL

Assessed value: $4,517,800

Taxes at full value: $65,553

Proposed payment: $16,388

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