PILOT Payments Offer Pathway for Ameliorating School Budget Crisis
Amherst Regional High School. Photo: Wikimedia Commons
Here are a dozen pieces of new information we have researched on payment in lieu of taxes (PILOT) related issues in town. For additional background on Amherst College’s PILOT relationship with the Town of Amherst, look here.
- In recent negotiations, Amherst College only offered the town $100,000 per year for Amherst Elementary Schools and Amherst Regional Public Schools (ARPS) combined, in-spite of $2.1 million dollars in projected cuts. The Regional School District does not have its own negotiating team engaging with the college but must rely on the Town Manager.
- Amherst educators and town employees contribute nearly 9 times more in taxes than Amherst College does in PILOT. Of 1,800 town and school employees combined, approximately 200 of them have a last name listed on both the town property search and the town or school payroll. Those employees pay an average tax bill of $5,500. (200 x $5,500=$1,100,000 compared to a recurring $130,000 annual donation from Amherst College)
- Amherst College’s endowment provides them with $136 million annually for operating costs at a 4.4% draw rate.
- Amherst College contributes 90,000 dollars per year to fire/EMS services, however, if this service was billed as a billable service, they would owe $252,000 dollars annually. Increase the PILOT to this amount would allow the town to hire three full-time, benefitted firefighters at their starting rate of $44,000 per year. (Assuming benefits cost $15,000 per employee, (see job postings on amherstma.gov))
- The Amherst College President’s home, valued at over $1 million sits on a street maintained by the Town of Amherst. Despite this, the town receives nothing in annual property taxes and the house was removed from the tax rolls in 2021.
- After the college attempted to donate land on South East Street to the town, for the construction of a new DPW facility, Amherst College has not offered any new contributions to address working conditions of DPW staff who provide them services on a daily basis. Imagine the outrage from parents and students if Amherst College dorms were in the same condition as our Public Works Building that is only a 10 minute walk from Amherst College down South Pleasant Street. As a group, these DPW workers are also the lowest paid employees of the Town of Amherst on average.
- Brown University recently announced a PILOT contribution of $46 million dollars over 10 years to the City of Providence. ($4.6 million per year)
- On January 30 of this year, Princeton announced a $50 million contribution over five years to Princeton, NJ
- University of Pennsylvania announced $10 million per year in contributions to its host community of Philadelphia, PA
- Williams College is donating $5M toward Williamstown’s $22M new fire station.
- Princeton University paid $22M to its host community in 2023.
- Providence, Rhode Island has completed an agreement with a cluster of private Universities and Colleges to receive $233M in PILOT over the next 20 years.
More information
A list of PILOT by Boston colleges to the city of Boston in 2023
Sunrise Amherst
Sunrise Amherst is the Amherst hub of the Sunrise Movement, a national youth-led climate and racial justice movement.
A few years ago, the Boston Globe reported that UMass Lowell pays Lowell $1 million a year.
I wouldn’t expect Amherst College to contribute more to the schools. The Amherst schools are a poorly run enterprise.
I would be interested to see what Amherst College actually does contribute, before I criticize them .
Amherst College currently contributes $65,000 to family and services outreach for the schools. Which hasn’t increased in years. The other contributions Amherst college makes to the town (not the schools) are listed above and total around $130,000.
While giving Amherst schools the cold shoulder, Amherst College has donated $1 million to the private fundraising (not the public tax supported) share of the $46.1 million Jones Library expansion, the pet project of the college’s two associates, Kent Faerber and Austin Sarat. By advancing the excessively expensive library project, the college has effectively reduced the amount of revenue available to Amherst’s K-12 schools and other town services.
Such crass self-interest is a big reason why Massachusetts needs to pass a bill like H.2824, “An Act to Support Educational Opportunity for All” which would impose a 2.5% excise tax on private institutions of higher learning with endowments valued at more than $1 billion. Hampshire district state reps Mindy Domb and Lindsay Sabadosa have voiced their support for the bill and Hampden District’s Adam Gomez has presented a state senate version, S.1834.
Amherst College can do more . They seem to be rather stingy with their contributions .
Depending on what portions of Amherst College assets were actually subject to this annual 2.5% excise tax proposed under H.2824, “An Act to Support Educational Opportunity for All,” the resulting annual payments from the College into the Commonwealth fund mentioned in the pending legislation might top $100M annually.
With all due respect to the proponents of this pending legislation, if the College’s current annual draw on its endowment is already in the $150M-per-annum range, then one wonders how likely this pending legislation will ever become law?
Maybe someone made an arithmetic error, or misplaced the decimal point while typing, but might not a smaller annual fraction — perhaps 0.25% — be more realistic?
You’re right, Rob, that H.28224/S.1834 would demand a much greater payment from Amherst College than previous legislative attempts to enable PILOT agreements with cities and towns. The current congressional session is also considering H.2963/S1836, “An Act Relative to Payments in Lieu of Taxation by Organizations Exempt from the Property Tax.” This bill would allow municipalities to assess up to 25% of the local property tax rate on certain tax-exempt non-profits. It might be more to the liking of Amherst residents as it would direct well-endowed institutions’ tax payments to the local community rather than a state trust fund.
Both sets of proposed bills represent a growing sense that wealthy institutions like Amherst College are not carrying their civic weight.