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SFCB -Pro,ject Plan for Development of PILOT for t1�e City of Sprin�field Pa�e 1 I � Part I: PILOTs and Program Options �'�L,O�`s Defined PILOTs are usually voluntary or negotiated payments made by tax-exempt organizations or in some cases legislated payments by another govemmental entity to local govemments. The payment terms of PI�Q'�s — as well as the types of payers and recipients — vary widely from case to case. The most significantF'xLq'�s are vo1�u�.�ary payments made by larger nonprofit organizations. Thesepayments can be largely symbolic donations by a nonprofit organizationto a jurisdiction from which the nonprofit is exempt �m taxes, or payments to cover the cost of police, fire, snow removal or other local services the nonprofit receives, or even major contributions that approximate or exceed what the jurisdiction would collect from taxing the properiy to promote the fiscal security of the j urisdiction or to fund a specific public initiative. Most of the time, the payments do not equal wk�at the jurisdiction would collect if the property were taxed, but do provide at �east some relief to the local govemment. Some regionally well-��own PII,OTs include Harvard Uazvexsity's payments to Cambridge and Boston, Massachusetts and Ya1e University's annual payment to New Ha�en, Car�ecriaut. F{�r�ry,�x� paid Cambridge $1.7 mi�lzoaa in fiscal year 2004 on tax- exempt properiy, and agreed in 1999 to pay Boston $40 million over 20 years for property it owns in that city. Ya1e contributes more �ly�n $2 million per year to New Havez� on tax-exempt properiy for fire services, in addition to paying taxes on non- educational properiy. State Programs Some PII,OTprograms are sponsoredby state govei�uxa.ents. Connecticut's PII,OT Program is considered by local officials as a�a�ode� for the nation. Connecticut's program is one of only a handfnl. In every other state program, while there may be a partial payment for lost taY revenues for state owned property, there is no state payment to municipalitiesfor t�e revenue that would ha�e otherwise come in from private tax exempt institutions. Additionally, it is the only PII,OT program that mandates reimbursement at a high level. In Connecticut, the state gova��z�aez�t makes direct payments to local govemments based on the amonnt of propei�ty owned by the state or by nonprofit colleges and hospitals. The state program pays a percentage of the taxes that would be paid if t�e properiy were not tax-exempt: for example, up to 100 percent of the lost value for correctional facilities; up to 65 percent for state hospital properiy; and up to 77 percent of the lost value for properiy owned by private, nonprofit colleges and hospitals. . J.F. Ryan Associates, Inc. September 16,2005