PILOT Better Local Impact

As a nonprofit institution, Harvard is tax exempt on multiple levels. But for a city like Boston — whose land is shared by the government and nonprofits — such tax exemption poses a significant problem for municipal finance As a result, in 2011, the city instituted the ‘Payment In Lieu Of Taxes’ or ‘PILOT’ program, which calls for some nonprofits that own property valued at more than $15 million to contribute 25 percent of the standard property tax rate both monetarily and through community contributions. For the seventh consecutive year, the University has failed to reach that 25 percent marker, this past year contributing only 79 percent — $9.8 million — of the city’s request.

We are not critical of the University in so far as it failed to reach the city’s requested dollar amount. Our concern lies in the idea that this shortcoming is indicative of a larger unwillingness on the part of the University to meaningfully give back to a community, to which it owes much of its institutional success, and to trust its determination of its own needs. As such, we call on Harvard to assess in a self-critical and honest manner the impact it has had on its municipal community and how it can go about being and becoming the best neighbor it can be.

It’s worth noting that the figures proposed by Boston are based on property values set in 2011. Harvard’s assets have increased significantly since then. Fixed assets alone, within which category property value resides, had risen by 2017 nearly two billion dollars since the 2011 audit, and many argue that assessments of nonprofit assets are often grossly underestimated. As such, even if it were to meet the current ask of the city, Harvard would be offering well below what might be considered even minimally just given its holdings.

But that’s not the main issue here. Though these PILOT figures represent a significant and voluntary contribution, we do not believe that they accurately or fully account for Harvard’s responsibility to the Cambridge and Boston communities. As we have opined in past, the University and its students play a significant role in changing the city’s landscape, driving up rents, and making it more difficult for residents to maintain a high and fulfilling quality of life. The University should be conscious of this impact, as it thinks about the degree to which it gives back to the community directly and through contributions to municipal government.

In light of this, Harvard should attempt to assess fairly and honestly its impact on the local communities and it should recognize and honor its ethical obligation to be said good neighbor.

The lack of fulfillment of the PILOT request in full is troubling because it represents an unwillingness on the part of the University to believe local governance in terms of how much the University actually owes. When the city has already reduced its expectations and when it allows for half of the expected contribution to be fulfilled by a valuation of services rendered as opposed to direct monetary contribution, failure to meet what can only be understood as a very low bar represents the shirking of a much larger responsibility to the community — not to mention the University has now done so all seven years PILOT has existed.

In the seventh anniversary of the reformed program, it’s time for the University to reassess its relationship with the program, considering how it can be a more positive and giving leader in the Boston community.

This staff editorial solely represents the majority view of The Crimson Editorial Board. It is the product of discussions at regular Editorial Board meetings. In order to ensure the impartiality of our journalism, Crimson editors who choose to opine and vote at these meetings are not involved in the reporting of articles on similar topics.