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2007_0820_Packet
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2007_0820_Packet
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Roseville City Council
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Council Agenda/Packets
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SFCB r project Plan for Development of PILOT for �IL� City of Springfield �age 3 <br />Benefits of a PILOT Program <br />The reason local govermnents sp�icit I�i�O� ;���r��r�*_s is simple —they generate <br />revenue. The rationales jurisdictions cite when solicitingcontributions include the loss of <br />revenue from tax-exempt property, the cost of �zovid.ing municipal services to the <br />organization, budget shortfalls, and a civic duty to be a"good neighbor° to the <br />corr�inunity. In certain jurisdictions, the large amount and high value of tax-exempt <br />property eliminates a large share of the tax base, adding to the burden on other residents <br />and businesses. PILOT proponents argue that it is not fair for residents to pay higher <br />propertytaxes so that relativelywealthy organizations can pay no taxes whatsoever, <br />especially when they receive costly services. <br />The motivation for tax-exempt organizationsto pay �'ILO'�s is more complicated. Some <br />organizations recognize the value of services they receive from the local �;overnm�t and <br />are willing to pay their fair share of those costs. These organizations also znay wish to <br />generate good vc�ll in the community by contributing to local revenues. In inany cases, <br />however, a non�rnfi� only negotiates a PILOT or some other voluntary contribution after <br />being approachedby the local jurisdiction, or even faced with the prospect of so�zxe other, <br />mandatory tax or payment levied by the local gover.r�ne�t. <br />In fact, a tension often e�sts between local jurisdictions and the nonprofit organizations <br />based there --- even among nonprofits already paying �'Z�.Q'�s. Differences over what is <br />the appropriate amount to contribute arise when PILOT agreements are renegotiated, <br />when the jurisdiction is experiencing new fiscal difficulties, or when the nonprofit <br />organization purchases additional property that subsequently becomes tax-exempt. <br />Cities such as Washiz�g,ion, D.C., Boston and Cambridge, Mass., haue found it difficult to <br />cope with the fact that over half of all �z�n�e�-ty within their city limits is tax-exempt. And <br />sY�a��ez� cities such as Worcester, Mass., and Urbana, ill., have faced the erosion of their <br />tax bases when colleges and other nonprofits purchase additional property. <br />Harvard University's recent 20-year PILOT agreementwith the City of Boston was <br />negotiated only after City officials were surprised and alatmed by the university's quiet <br />purchase of 52 acres of property within the City. I�arvazd University now owns inare <br />land in Boston than in Cambridge. <br />For their part, tax exempt entities generally resist calls to begin or increase their <br />contributions to local jurisdictions. They often respond by enumeratingthe positive <br />beneficialimpact they have on the locality, including creating jobs,1�a�c�x�� local <br />purchases and paying miSCelLanet�rzs taxes and fees. They also inay cite their <br />acco��p�ishments in serving coinmunity needs and warn that increased financial <br />contributions to local govermnent will result in a reduction of whatever c4zn�r��nzty <br />services they may provide. <br />J.F. Ryan Associates, Ine. September 16, 200� <br />
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