Synagogues Paying Taxes?

It may happen for some.

When I see the word “PILOT”, the immediate thought that comes to mind is the person who flies a plane. When I have my synagogue hat on, I also think of a new program or initiative for the synagogue that is being offered for the first time.

For people involved in municipal governments, “PILOT” takes on a whole new meaning, specifically related to money: Payment In Lieu of Taxes.

Many leaders of municipalities with government land (state or federal national parks), private and state universities, hospitals and even houses of worship are thinking about PILOT often.

Universities and Hospitals/medical centers have large footprints and often have large endowments as well. But while they have not-for-profit status, critics have suggested they operate like businesses. And in many cases, such institutions are providing no financial support for local services – like police, fire, schools, and road maintenance.

Is this right?

There are a number of universities and medical centers throughout the United States that do make such voluntary payments.

In a previous blog about PILOT, I opined that the separation of church and state would be the major concern when this issue was raised for houses of worship in a particular community. Recently, I have been exchanging emails with the treasurer at a Massachusetts synagogue. He received a letter from the local tax authority which I believe asks for the synagogue, and all houses of worship in this municipality, to make a voluntary PILOT.

There seems to be a lot of voluntary PILOT happening in cities and towns throughout Massachusetts. After all, in Boston, Cambridge and in towns throughout the Commonwealth there are many colleges and universities. And think of the medical complexes throughout Greater Boston.

And now, there is precedence during the current century of houses of worship making a voluntary PILOT to local municipalities.

In 2013, the First Parish Bedford, a Unitarian Church in the Boston suburb of Bedford, MA made a $1,000 PILOT.  Not much money of course, but a symbolic gesture nonetheless. Houses of worship benefit greatly from local services. I have the vision of the police car that is often idling in the parking lot of my synagogue as an example of such services.

But what about synagogues? I did some Internet research and came across a 2015 document from the Town of Northampton, MA. Smith College is located in Northampton and owns land and property that has a value of more than $420 million. In 2015, Smith College paid the City of Northampton more than $90,000 as part of the PILOT program, which was tied to the college purchasing buildings from the City of Northampton.

Similarly, Congregation B’nai Israel in Northampton, purchased a developable parcel of land from the City in 2002. The synagogue in 2015 paid the City of Northampton more than $7000 as part of the sales agreement so as not to totally remove the property from the tax rolls.

What does this mean for your synagogue? Who knows. It does make sense that municipal governments will be turning to property owners whose property has been taken off of the tax roles for some type of financial support.

And I am not sure the argument about separation of Church and State will carry the day.

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