Our Opinion: PILOT fund fairness for county hill towns

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For Berkshire hill towns like Washington, Mount Washington and others, PILOT (Payment in Lieu of Taxes) isn't looked upon as largess from the state; it's a necessity when large swaths of Commonwealth-owned land within their borders cannot be taxed by local authorities because the towns themselves are creatures of the state. Because our Boston-based state government is in the enviable position of unilaterally determining the tax valuation of its own property, it can pay as little as it chooses to Western Massachusetts municipalities that depend on PILOT payments to finance critical town operations.

Following the "out of sight, out of mind" mentality that afflicts many Eastern Massachusetts legislators when it comes to giving the Berkshires an equal shake compared to more proximate population centers, the state House and Governor Baker are supporting the rolling back of PILOT reimbursement rates to towns that depend heavily on the payments to make ends meet. The monies involved could hardly be considered significant in a state budget that numbers in the tens of billions of dollars. To use the example of Mount Washington, the figure in question is a mere $67,000. For a town its size, however, that represents a whopping 28 percent of its annual operating budget.

As if such cuts weren't traumatic enough for these communities, a complex and opaque Department of Revenue formula determines that land the state bought for a certain amount is actually worth far less than its purchase price for tax valuation purposes. The state also regards acreage in some towns as more valuable than in others, creating windfalls for communities like Great Barrington and West Stockbridge that depend far less on PILOT revenues than their poorer uphill brethren.

With the preponderance of state forest land located in Western Massachusetts, only elected officials from that area can be expected to look out for the area's interests — and the Berkshires, clout is limited. Fortunately, the Senate has a more holistic view of state finances, and its version of the pending budget includes an extra $2 million in PILOT funds to maintain an approximately level budget, with the idea of shielding small, PILOT-dependent towns from wild fluctuations in state reimbursement funds (Eagle, June 12). Whether this measure makes it all the way through the joint reconciliation process is yet to be seen, but also important for the future is a measure introduced by state Senator Adam Hinds that would fund a study of PILOT's mechanisms and impact.

There is no House version of Senator Hinds' amendment, although state Representative William "Smitty" Pignatelli tried in vain to have such a study included. There remains a chance that the Hinds Amendment could be adopted by the House-Senate Conference Committee when crafting the final budget. What makes such a study valuable is that it could finally shed light on a complicated process and the significant impact that reimbursement fluctuations have on small communities containing large amounts of state land. A deep dive into the problem producing data-based results would predicate the PILOT program's reimbursement formula on hard facts, rather than leave it to be funded or starved depending on prevailing political currents or the vagaries of DOR land value assessment. It would also help to establish a rough benchmark preventing the wild funding swings to which the towns are currently falling victim.

We urge the entire Berkshires delegation on Beacon Hill to press for inclusion of both the Senate's proposed $2 million supplement to the PILOT program, as well as funding for the state study in the reconciled budget bill — the first to mitigate present harm, the second to provide a measure of stability in funding expectations so that dependent towns can make realistic budgetary decisions in coming years without fear of having the rug pulled out from under them.




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