HOLYOKE — Mayor Joshua A. Garcia is contracting with a public policy consultant to help Holyoke initiate a formal Payment in Lieu of Taxes (PILOT) policy.
“Because we are a compassionate City, we are home to an exceptionally large number of tax-exempt nonprofits that offer a range of services to vulnerable populations,” Garcia said. “Along with group homes, human service providers, and treatment centers, we also host a number of educational institutions that receive City services but pay no property taxes.
“We have no quarrel with the importance of their missions,” he said. “All citizens, including the vulnerable populations these nonprofits serve, deserve quality services from their government. But I can’t give quality services if I’m not collecting the necessary revenue to keep up with the need. I, too, have a mission. As Mayor, I’m responsible for public safety, public education, sewers, streetlights, drinking water, and safe roads, to name a few. Property taxes fund these services, either entirely or in part. Another part of my mission is to keep those taxes low so that people can afford to live here.
“Many tax-exempt organizations acquire taxable properties and then file for exemptions, thereby removing that property from the tax rolls. It happens a lot, and each time it happens the flow of property tax revenue to the City is diminished. All the while, the cost of City services goes up, salaries go up, fuel goes up, and road maintenance materials go up. What else goes up? Your property taxes.”
One of Mayor Garcia’s Citizen Advisory Councils — the Government Restructure working group — explored the subject of PILOTs and reached out to the Collins Center for Public Management, a state government entity affiliated with the University of Massachusetts-Boston. The Center submitted a proposal for a six-month, $13,000 study that entails meetings with City officials; fact-gathering on the tax-exempt properties in Holyoke, research on existing PILOT programs in the Commonwealth, including those in Boston and Brookline, and an in-person meeting with tax-exempt property owners. Two members of the project team, Stephen Cirillo and David Colton, have experience developing and negotiating PILOTs for the towns of Brookline and Easton.
On concluding their research and interviews, the Collins Center project team will present the City with options for a voluntary PILOT program. These options will include revenue projections.
In the past, Holyoke negotiated a small number of informal PILOT agreements, but the documentation for these agreements is scant. Garcia said he wants a formal, written policy complete with talking points and a formula for establishing a PILOT payment schedule for the City’s tax-exempt properties.