Valerie Wencis
As Belmont struggles to increase its tax base, the town is potentially missing out on money from tax-exempt organizations that could be making a payment in lieu of taxes, or PILOT, a program that has successfully increased revenue in neighboring communities, including Lexington and Cambridge.
Nonprofit organizations are exempt from paying property taxes, though many in other communities choose to make a payment to towns to help cover municipal services, such as police and fire, trash collection, and street plowing.
In Belmont, Administrative Assessor Dan Dargon said his office sends letters to more than 30 tax-exempt entities each year, requesting meetings to discuss participation in PILOT. It turns out these letters are very easy to ignore.
“There is no response,” he said.
Some wealthy nonprofits, such as Belmont Hill School, with net assets of $176 million, and Belmont Day School, with net assets of $30 million, have chosen not to make voluntary payments to cover town services.
The Belmont Lions Club, with assets less than $500,000, is the only nonprofit voluntarily participating in PILOT, paying about $1,000 a year, according to Belmont’s Assistant Town Administrator and Finance Director Jennifer Hewitt.
Dargon noted Belmont also has three “contractually active” groups obligated by law to make PILOTs: the City of Cambridge for use of the Payson Park Reservoir, the Belmont Housing Authority, and Waverley Woods, the affordable housing units on Olmsted Drive.
Altogether, Belmont received $36,000 in PILOTs in fiscal year 2021, whereas neighboring Lexington and Watertown received $683,000 and $1,025,000, respectively, according to the Massachusetts Department of Revenue Local Services.
It’s unclear how much Belmont is losing in property taxes from nonprofits because the Assessor’s Office never returned requests for the information and, according to Select Board members, never compiled that data for the town.
Streamlining PILOT Effort
Belmont may have more success collecting PILOTs if the town leadership sent a coordinated message with the assessors asking nonprofits to contribute, according to Dargon.
“It shouldn’t just be the assessors; it should be the town,” he said.
The Warrant Committee echoed Dargon’s sentiment in its 2023 report but with a focus on how the Board of Assessors is chosen.
The committee recommended shifting the Board of Assessors to an appointed rather than an elected body and that the “Select Board should then implement a comprehensive PILOT…program for the Town’s non-profit landowners.”
That issue ended up on Belmont’s April 2 ballot, and voters agreed to change the board to an appointed group by approving Question 2 with an 11-vote margin. A recount is expected.
Select Board Vice Chair Elizabeth Dionne said the elected board failed to provide information and didn’t support efforts to negotiate payments from the town’s wealthier nonprofits. She also criticized the group for failing to help create a senior tax relief program or working with the town to rezone properties to increase tax revenue.
“They have not been cooperative,” she said. “We need their active cooperation as we engage in rezoning to make sure we are rezoning to the highest and best use to ensure we are achieving maximum valuation.”
Town Administrator Patrice Garvin said her office has tried to work with the assessors and Belmont nonprofits on PILOT, with an emphasis on building relationships “to move that needle forward.”
“I’m definitely optimistic in working with some of the entities in town to try to get something going,” she said.
Garvin warned against viewing increased PILOT payments as a cure-all.
“It’s not the magic cure. It’s only going to alleviate some of the small pressures,” she said. “We’re not talking about fixing our revenue problem.”
Belmont Hill School Cites 200-year ‘Principle’
Former Select Board Member Mark Paolillo said some nonprofits, like churches, can’t afford to make a payment. Others, however, such as Belmont Hill School, seem to be prime candidates for participation.
“Frankly, we’ve not been successful,” Paolillo said, despite the town’s efforts to engage with the school.
According to its most recent tax filings, the Belmont Hill School generated approximately $43 million in revenue in 2022 with $11 million left over after expenses. It has net assets of $176 million. Head of School Gregory Schneider received nearly $700,000 in total compensation that year. The school’s website notes that it occupies 37 acres.
According to the school’s website, students pay tuition of $61,400 a year.
Despite its wealth and size, the school does not seem likely to make any voluntary payment to Belmont.
In a statement to The Voice, the school’s director of communications, Bill Mahoney, said the school “maintains an ongoing commitment to providing services to the Town of Belmont that provide a direct economic and community-building impact.”
According to Mahoney, those services include using the school’s facilities and playing fields, offering summer school and summer camp discounts, a community service program where its students contribute to town projects, and educating students from the town of Belmont.
“[W]e also believe in the principle maintained by the Commonwealth of Massachusetts for well over 200 years that not-for-profit institutions are not required to pay taxes,” Mahoney wrote.
Meanwhile, in Lexington, the Waldorf School paid $42,354 to the town in fiscal year 2023, per Lexington’s Revenue Projections report. Brookhaven, a nonprofit senior living community in Lexington, paid $617,060 to the town. Both entities are expected to increase their contributions in 2024 and 2025.
Future of Assessors Board
If the April 2 vote is not overturned in a recount, the Select Board will appoint the Board of Assessors going forward, which could allow the town to get some basic information — like how much money a nonprofit would pay if it weren’t tax-exempt.
Paolillo said once the town has that number, it could request nonprofits pay a percentage of it. Boston, for example, asks nonprofits to pay 25% of its estimated tax bill because that would cover public works and public safety services.
Paolillo said Belmont could ask Belmont Hill School for a similar percentage and deduct the cost of renting the school’s gym and fields to arrive at an equitable number for a PILOT payment.
Hewitt, the town’s finance director, didn’t comment on efforts to secure more PILOT contributions but said the town is looking at more predictable revenue sources, such as its water and sewer rates.
She said it costs more to provide those services to institutions like McLean Hospital, Belmont Hill School, and Belmont Day School.
“The fixed charge component didn’t have a lot of variation between a residential meter or commercial meter,” Hewitt said. “So we wanted to make sure they’re paying their fair share when it comes to services.”
Hewitt said the town adjusted those rates for fiscal year 2024, and the Select Board will consider a similar adjustment to meet industry recommendations this year.
