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Ceci N'est-ce Pas Une Taxe

Post #1488 • January 4, 2012, 6:55 AM • 2 Comments

Malcolm Rogers, Director of the Museum of Fine Arts, Boston:

The Museum of Fine Arts, Boston, is one of the world’s great cultural institutions, whose impact on the quality of life of its city is immeasurable. But the generosity of spirit that built this great museum is being buffeted by a surprising entity—the City of Boston itself—which has put in motion a plan to drastically increase the “voluntary” contributions cultural institutions make through its payment in lieu of taxes (Pilot) programme. When civic leaders look to cultural organisations as a source of revenue, rather than as an invaluable resource for the communities they serve, it has dire implications nationwide.

Waitasec. Quote-unquote "voluntary"?

As a charitable organisation, the MFA is exempt by law from state and federal taxes. However, the programme developed by Boston’s Pilot task force circumvents this status by recommending payments for important city functions, such as the fire and police services. To the best of our knowledge the MFA is the only major art museum in the country that makes payments in lieu of taxes. We have participated in this revenue initiative since 1988 when the museum opened its parking garage. We contributed $55,000 in 2010/11. The proposed increases would raise our payments to $250,000 in 2011/12 and to $1,025,000 in four years. The new Pilot formula sets the payment at 25% of the estimated tax a cultural organisation would have paid if it were a taxable entity, less a 50% community service credit. In devising this plan the task force never sought the input of any of the city’s cultural institutions.

Waitasec. "Task force"?

The escalation in Pilot payments comes after a nine-member task force set up by Mayor Menino in 2009 recommended that the scheme be reformed. Since the 1970s more than 30 charities have made annual contributions towards the cost of public services, such as the fire and police forces and street maintenance. The Museum of Fine Arts’ payments were linked to the cost of a permit to use its parking spaces.

Waitasec. The mayor?

Mayor Menino is a trustee of the Museum of Fine Arts, having joined the board when first elected mayor in 1993. When he attended the opening of its Art of the Americas wing in 2010, he praised the director’s commitment to providing access to all. “The Museum of Fine Arts is more than just culture. It is about community. The Museum of Fine Arts serves people of all ages, backgrounds and abilities,” said Menino.

The mayor is also due to cut the ribbon at the opening of the Isabella Stewart Gardner Museum’s wing on 19 January. Stephen Kidder, the chairman of the mayor’s task force and the city’s former commissioner of revenue, is a trustee of the Gardner museum.

Tricky. Liza Eliano of Hyperallergic did some research:

David L. Thompson, vice president of Public Policy at the National Council of Nonprofits, explained to Hyperallergic that the new PILOT initiative is basically, “A tax in everything but name.” He noted that normally PILOT payments are enacted for educational and medical institutions, especially when they offer to buy property that could remove real estate from the city’s tax rolls. What makes Boston’s situation different, Thompson emphasized, was the creation of a PILOT task force whose first rule of business was to lay the burden on cultural institutions as well so as to create a broader funding pool. “The task force has clearly chosen to ignore the economic impact museums have on the city,” Thompson said, referring to the important role museums play in attracting tourism and revenue to the city.

Judith Dobrzynski, who wonders why the Association of Art Museum Directors hasn't so much as peeped about the matter, cites Boston Globe columnist Alex Beam from a few months ago:

I was on my way to dinner last week when I stopped in on Museum of Fine Arts director Malcolm Rogers’s Lowell Lecture at the Boston Public Library. It was an interesting presentation, sadly underattended. The talk warmed up about halfway through when Rogers started griping about the city’s "lack of vision" where the MFA’s finances were concerned. Specifically, Rogers was venting about Boston’s unsubtle tax shakedown directed against nonprofits, called the PILOT program, for Payments in Lieu of Taxes.

I bearded Rogers after his talk, expecting him to back off his tough rhetoric. But he stayed steamed, in a buttoned-down English way. The city had just jacked up his annual PILOT payment from $66,000 to $250,000, and was planning to tag him for a cool million down the road. The veiled threat to nonpayers is that the traffic light outside the main entrance won’t get fixed, or the key side street leading to the staff garage won’t be plowed, and so on.

Good gravy.

What’s harder to explain [than the method by which the PILOT amount is determined for each nonprofit] is why anyone pays at all. There is no statutory basis for taxing nonprofits—quite the contrary—but no one has yet taken the city to court on the PILOT program. A plaintiff with a smart lawyer could win—and alienate City Hall forever.

Curiouser still, the nonprofits prefer to hang separately rather than form a coalition to negotiate with the mayor. Practically every college, hospital, or art museum has some urban bigshot on the board of directors who supposedly has juice in the mayor’s office. (Menino himself is an MFA trustee, although he hasn’t attended a meeting in at least 17 years.) Some institutions—Harvard and Boston College, for example—squawk more than others. But when push comes to shove, most of them pay pretty close to what the mayor asks.

If taxation is robbery, this Pilot thing is a protection racket.

Comment

1.

A Reader

January 4, 2012, 9:29 AM

Do local police departments pay taxes? Or do they make payments in lieu of taxes to the museums and cultural institutions that lead to lower crime rates in a city? I certainly hope the police and fire departments are paying their fair share for the services provided by these cultural institutions.

2.

Walter Darby Bannard

January 4, 2012, 10:28 AM

Although a municipal art museum is not directly comparable to police and fire departments, A Reader makes a point.

Where do you draw the line with tax policy? Cities (and states and the federal government) are desperate for money because they spend irresponsibly and cutting back on spending is political suicide. In this case Boston has apparently decided that the most politically acceptable target for disguised taxes is a high culture institution full of rich trustees.

However, if they get away with this, Salvation Army soup kitchens are not far behind.

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