Today’s numbers are: $488,630 and zero – the amount of voluntary payments in lieu of taxes made by tax-exempt institutions to the towns of Andover and North Andover, respectively.
Andover’s so-called PILOT agreement with Phillips Academy dates back to 2002, according to Patrick Lawlor, who stepped down recently as the town’s chief administrative and financial officer to become assistant town administrator in Burlington.
For the fiscal year ending June 30, Phillips paid the town $488,630 under the third year of a 10-year agreement with 2.7 percent annual increases each year. It is the fourth such agreement with the town.
For the fiscal year starting July 1, PA will pay Andover $501,823. By fiscal year 2032, the final year of the agreement, the amount will rise to $588,807.
Phillips Academy, the prestigious private secondary school founded in 1778, owns 144 properties in Andover, which under state law are exempt from taxation. The statute provides such exemptions to an array of non-profit educational, medical, cultural and other institutions in recognition of the value of enhancements, including economic, they provide communities.
Neighboring North Andover does not have any comparable agreements with tax-exempt institutions, which include Merrimack College and Brooks School, according to the town’s chief financial officer, Dennis Keohane.
In Boston and Cambridge, communities replete with renowned institutions, PILOTs are a major source of income but also friction caused by calls in some quarters for them to make more generous voluntary contributions to offset the loss of property tax revenue and the cost of municipal services they require.
A Boston Globe story on May 31, for example, speculated that efforts by the city of Boston to seek more PILOT contributions would be hurt by the Trump Administration’s aggressive efforts to cut research and other funding sources which flow to the city’s acclaimed hospitals and universities.
Under Boston’s PILOT program, the city in fiscal year 2024, received a total of $34.9 million in cash from 13 universities (led by Boston University at $6.3 million), 11 hospitals (led by Massachusetts General Hospital at $6.9 million), and three cultural institutions.
The City of Cambridge, in the same year, received voluntary PILOT payments of $4.7 million from Harvard University, $2.4 million from the Massachusetts Institute of Technology, and $1.5 million from the Hult International Business School.