MANS&C Opposes Bills to Tax Nonprofits
MANS&C Legislative Counsel has spoken out against two bills that would allow communities to impose Payments in Lieu of Taxes on nonprofit schools, colleges and universities. In testimony presented at a recent public hearing of the Revenue Committee, Spillane maintained that nonprofits have a constitutional right to tax-exemption on property used for educational purposes.
If the total for its five highest-compensated individuals is more than $2.5 million, House Bill 3526 would require an institution that acquires formerly taxable property to apply for a real estate tax exemption on it or enter into a PILOT agreement with its local community.
Spillane said the bill fails to recognize that when it comes to compensation packages, nonprofits generally cannot compete with the private sector.
"The only way that educational institutions can continue to attract talented employees is to offer strong salaries," he testified. "In Massachusetts, we want our institutions to continue to be the best in the world. We should not penalize them for wanting to attract the best employees in the world in order to stay competitive on the world stage."
Spillane also opposed House Bill 1565, which would require nonprofit schools, colleges and universities to pay local communities 25 percent of what they would pay in property taxes if they were not tax-exempt.
The required payments would drain vital operational funds that are needed to continue to provide educational resources in pursuit of educational excellence, he told the committee.
Most independent educational institutions do not have unlimited resources, Spillane pointed out. In many cases they have been able to grow and thrive because of their real estate tax-exempt status.
"Payments forced under this bill may offer an immediate cash benefit to communities, but the vision here is myopic because such a mandate will assuredly stifle the overall substantive contributions that educational institutions make to their communities," he said.