Andover Townsman, Andover, MA

News

July 18, 2013

Town: PA should pay more money

Officials eye tax-exempt nonprofits to boost revenue

Phillips Academy would pay the town more than $700,000 a year — more than a 200 percent increase — under a new “payment in lieu of taxes” policy proposed this week by the town manager.

In a report to the Board of Selectmen Monday night, Reginald “Buzz” Stapczynski said the private, nonprofit school’s property off Main Street is assessed at almost $194 million.

If Phillips was taxed as a for-profit business, the school would pay $2.8 million a year in property taxes to the town.

Under an agreement dating back to 1999, however, the school pays only $169,303 a year in lieu of taxes. The school also pays $122,950 a year on its taxable property, for a total annual payment to the town of $292,252.

Stapczynski recommended that Phillips as well as all other nonprofits with property assessed at more than $4 million be required to pay 25 percent of what their tax bill would be if their weren’t a tax-exempt organization.

Under that formula, Phillips would be accountable for a little more than $700,000 a year.

Town officials are currently negotiating with Phillips on a new so-called payment in lieu of taxes, or PILOT, agreement. The most recent, five-year agreement expired on June 30.

“I had a meeting with them several months ago and a follow-up phone call with Steve Carter to give him a heads up,” said Stapczynski, referring to the school’s chief financial officer. “We are going to meet with them to convey the policy and establish a new agreement and contribution.”

The town manager said he didn’t think the school ultimately would end up paying the $700,000.

“By straight extension of the policy, that’s what it (the payment) would be. That is what the policy would call for as a starting point,” he said, adding he expects there would be “many meetings” before a final agreement is struck.

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