As noted in a recent editorial, Portland is considering the implementation of a Boston-like PILOT (Payments In Lieu of Taxes) program (Our View, “Portland right to ask more from nonprofits,” Oct. 13).

We are sympathetic to municipal fiscal pressures caused by over-reliance on property-tax revenue, the unequal distribution of tax-exempt properties, cuts in state and federal funding and a down economy; however, we do not believe nonprofits are the appropriate relief valve for those pressures. We urge Portland to continue to approach this thoughtfully and without suggesting nonprofits do not pay their fair share.

Nonprofits have earned their tax exemptions by reducing the burdens of government and offsetting expenditures that would otherwise be made from tax revenues. For instance, Maine Medical Center provides more than $30 million per year in charity care, and Preble Street leverages private funding to reduce the city’s share of caring for the homeless.

Additionally, nonprofits increase quality of place. Cities like Portland, with a large nonprofit base, are more desirable places to work, live and do business, increasing economic opportunities and overall property values.

Several Portland nonprofits make voluntary payments, but increasing these payments should not be seen as a solution to Portland’s budget woes. A recent Reuters article cited Lincoln Institute of Land Policy report finding that PILOTs “will never be a panacea for cash-strapped governments. They simply do not generate enough revenue.”

Nonprofits tend to be the foundation of economically troubled areas, and rarely stray from the communities they were created to serve.

Nonprofits embody and sustain the fundamental social, cultural and spiritual values of trust, compassion, justice and moral behavior that bind us together.

For that reason, we as a society gave them special tax-exempt status. This exemption is still good economic and social policy.

 

Copy the Story Link