Legislative Measure Would Increase PILOT Payments to Towns, Cities
BOSTON — A bill that would see communities fully reimbursed for state-owned land in their borders has been filed in the Legislature.
The measure by State Auditor Diana DiZoglio to change the calculations of the state in making payments in lieu of taxes is sponsored by state Sen. Paul Mark and state Rep. Shirley Arriaga. It has been referred to the Joint Committee on Revenue that held a hearing Thursday.
PILOT programs help municipal governments replace some or all revenue lost from certain state property tax exemptions, including those associated with nonprofit organizations, recreational areas, and certain properties owned by the Commonwealth.
The State Auditor's Office released a report in 2020 that determined that the PILOT program is underfunded and disproportionately disadvantaged smaller, rural communities.
"Although it doesn't technically constitute an unfunded mandate, it is nonetheless the state-imposed burden on municipalities to take lands off the tax rolls, and therefore to our way of thinking, the state needs to make good on its promises to reimburse communities who are losing that revenue," then State Auditor Suzanne Bump said in 2021.
Underfunding the PILOT program has had a significant effect on smaller towns with large tracts of state-owned land.
Savoy has around 12,000 acres of state land for which it gets around $120,000 and the value of state land in the town of Washington is assessed at about $7.8 million — for which it's getting about $90,000.
The state owns more than half of the town of Clarksburg; its most recent PILOT payment was $26,285. Town meeting this year amended zoning to reduce lot frontage in certain zones as a way to get the state to recalculate land values.
DiZoglio last year said the program's appropriation has been around $30 million since the fiscal 2009 while property tax collections have increased by about 57 percent.
The bill, House 2697, would amend the Mass General Laws to require full reimbursement to communities for the taxable value of state-owned land. It also creates a hold-harmless provision that ensures cities and towns never see a decrease in their state-owned-land reimbursement.
Specifically, the bill repeals language referencing reimbursement percentages for PILOTs for state-owned land and directs the treasurer to make PILOTs according to a detailed formula. The current calculation is partly based on each municipality's state-owned land value.
A study conducted by the State Auditor Office's Division of Local Mandates noted that communities with decreasing, stagnant, or slowly increasing property values have seen reductions in their PILOT payments. Over time, this has resulted in a wide disparity in the payment amount per acre across the state, with central and Western Massachusetts receiving far less than the median in reimbursements.
According to DiZoglio's office, of the 56 municipalities hosting state-owned land, 15 saw lower PILOT payments in fiscal 2020, and a dozen of those were in central and Western Mass. For example, the PILOT payment for Plymouth is eight times that of Savoy even though they both have similar amounts of state forest acreage.
"It is critical that our cities and towns can trust our Commonwealth, regardless of where they are located on the map, to ensure regional fairness," said DiZoglio in a press release. "We must provide needed financial support to our local governments. Accordingly, I urge we get this legislation across the finish line so we can take meaningful action to address the inequities our communities are facing."
In a forthcoming report from DLM, the Auditor's Office will advocate for an additional payment for those communities that host state forest and wildlife management areas. This proposal is said to be consistent with the commitment in the state's "Clean Energy and Climate Plan 2025 and 2030" to assist communities with a low tax base but a high percentage of state-owned land.
"Our most rural communities are often charged to serve as stewards of our most precious natural resources, our forests, watersheds, and beautiful open spaces, and while that is a role we cherish, it has steadily become untenable without proper funding support from the commonwealth," said Mark in a statement. "I am honored to work in partnership with Auditor DiZoglio and Rep. Arriaga on legislation to update how PILOT works in our state so that much needed funding will flow to our cities and towns, enabling all regions of Massachusetts to thrive."
Tags: PILOT,
