PITTSFIELD, Mass. — Councilors John Krol and Helen Moon are asking Berkshire Medical Center for $1 million more annually.
The pair has filed a petition with the City Council asking for the sum through the execution of a payment in lieu of taxes (PILOT) agreement. Krol says the total is a quarter of what the hospital would have paid for all of its tax-exempt properties should those real estate holdings be taxes at the commercial rate.
"Berkshire Health Systems is an entity that is quite profitable. At the same time, we're, as a city, struggling to pay for an adequate number of teachers, to make sure the roads are maintained, and paying for health insurance," Krol said.
According to Assessor Paula King, Berkshire Medical Center owns a total of $120 million in assessed value for real estate. Of that, approximately $15 million is taxed, leaving $104.7 million in tax-exempt value -- which would translate to approximately $4 million in commercial tax bills. Not all of Berkshire Medical Center properties are tax exempt; that depends on the particular use.
She added, the hospital is "one of the top five real estate taxpayers in Pittsfield" with payments around $600,000 per year for real estate. The petition calls on that to increase by $1 million more.
BMC Spokesman Michael Leary says the hospital is not only the "fourth largest taxpayer" in the city but that the organization makes numerous other charitable donations. He cited funding a laptop project for the schools and contributing to the purchase of the ShotSpotter system. He estimates on average $10 million per year is given back to the community through "substantial community benefit expenditures."
"Five years ago, the city formed a PILOT Study Group, organized in part at the urging of Councilor Krol, explored whether, notwithstanding state law, Pittsfield should establish a voluntary program to ask local charities for financial contribution The Pittsfield PILOT Study Group concluded that such a program would be unwise for the city, in part because of the manner in which local charities already contribute to the city's financial well-being," Leary wrote.
Leary continued to say that BHS leases a "substantial amount of commercial real estate from private owners and contributes to the Pittsfield tax receipts through rental payments." He estimates that there 1,500 city residents working at the hospital and $91 million in wages alone have been given to those employees.
Moon said implementing pilot agreements had been on her radar since the campaign. As budget season approaches and the City Council just approved a large increase to residential sewer bills, she feels it is time to ask the city "most profitable business" to pay its "fair share."
"We constantly talk about our levy ceiling and how the taxpayers are being pushed to the limits," Moon said. "It just seems like their not paying their fair share."
Moon claims that between 2012 and 2016, the hospital made some $200 million in profit.
The petition, also signed by residents Marietta Rapetti Cawse and Frank Farkas, claims BMS had a surplus of $47 million at the end of 2016 while the city pays some $24.5 million in health insurance costs.
"Its parent company, Berkshire Health Systems, owns a growing number of physicians practices and other medical services. Because of this, Berkshire Health Systems is the ultimate recipient of a significant portion of what the city of Pittsfield pays for health insurance," the petition reads.
That main correlation Krol is attempting to make in the petition. He said 16 cents on every dollar in the budget goes toward health care costs while at the same time, Berkshire Medical Center has a number of tax-exempt properties.
"I think that correlation is not insignificant," Krol said.
Moon added that not only is the hospital receiving money from health insurance but also from co-pays, deductibles, and other out of pocket costs. She said the hospital has a monopoly on the county's health care.
"The Pittsfield employees and the residents of Pittsfield are kind of getting it from all angles," Moon said.
Krol continued to say that the city provides a number of services to the hospital, whether that be police and fire or simply maintaining the roads surrounding one of the city's largest employer's properties.
"At a time when it is challenging financially for the city, it makes sense. They should be paying more based on the fact that a lot is exempt," Krol said.
Moon said other communities have agreements with hospitals and the petition was crafted around those similar agreements.
The conversation isn't new to the city. In the past, the city had debated a policy on PILOT agreements with all non-profits. That hadn't taken hold and Krol feels that taking a more targeted approach toward certain non-profits could help get such agreements approved.
"It was important to focus the conversation," he said. "This is an attempt to derive more revenue that will help out the taxpayer."
Moon said she doesn't intend to go after all non-profits, especially the smaller ones, and believes in building a strong health care system. But she questions whether or not the hospital is giving back $4 million worth to the community.
"I'm not doing this to go after non-profits. I just think BMC is highly profitable," Moon said. "This is not an attack... we just need to look at things more critically."
The petition, if approved, would call on the administration to reach a PILOT agreement.
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