Local, state officials talk disproportionate impact of PILOT programs on Western Mass. communities

  • State Auditor Suzanne Bump met with state Sen. Adam Hinds, D-Pittsfield, Rep. Natalie Blais D-Sunderland, and Rep. Susannah Whipps, I-Athol, and town officials atop Mount Sugarloaf on Friday morning. Staff Photo/Paul Franz

  • State Auditor Suzanne Bump met with local legislators and town officials atop Mount Sugarloaf on Friday morning. Staff Photo/Paul Franz

  • The view south from Mount Sugarloaf on Friday morning. Blais said, pointing out to the valley below Mount Sugarloaf, “We are protecting these views, we are protecting this land, but at the expense of our communities.” Staff Photo/Paul Franz

  • State Auditor Suzanne Bump met with state Sen. Adam Hinds D-Pittsfield, Rep. Natalie Blais D-Sunderland, and Rep. Susannah Whipps I-Athol, and town officials atop Mount Sugarloaf on Friday morning. Staff Photo/Paul Franz

  • State Auditor Suzanne Bump met with local legislators and town officials atop Mount Sugarloaf on Friday morning. Staff Photo/Paul Franz

  • The view east of Sunderland from Mount Sugarloaf on Friday morning. Staff Photo/Paul Franz

Staff Writer
Published: 7/25/2021 5:02:06 PM
Modified: 7/25/2021 5:02:08 PM

SOUTH DEERFIELD — Gathered at the top of Mount Sugarloaf Friday morning, local Selectboard members, state senators, representatives and others gathered to talk with state Auditor Suzanne Bump on the impact of the state’s payment in lieu of taxes (PILOT) program for state-owned land on smaller communities.

Among those who joined Bump Friday were state Sen. Adam Hinds, state Reps. Natalie Blais and Susannah Whipps, and Franklin Regional Council of Governments Executive Director Linda Dunlavy. The visit to Mount Sugarloaf at 10:30 a.m. was the first stop of the day, with attendees continuing their discussion at Dubuque State Forest at 1 p.m.

Friday’s discussion was born out of a December 2020 report from the Office of the State Auditor’s Division of Local Mandates that addressed ways the PILOT program for state-owned land is underfunded and disadvantages Western Massachusetts communities with slowly increasing, stagnant or declining property values in favor of larger, wealthier communities in the east. The report made several recommendations to protect municipalities with reduced land and PILOT reimbursement values.

“I’m really excited that the Legislature has taken this report and really started to run with it,” Bump said Friday morning. “This year, they’ve increased the appropriation for the PILOT program by some $4 million.”

Earlier this year, Bump worked with the Legislature to file a bill to fix the PILOT program for state-owned land. Hinds and Bump have sponsored the bill, S.1875/H. 2831, which aims to “ensure that communities receive fair compensation from the commonwealth for untaxed state-owned land within their boundaries.” Blais has also filed a counterpart bill in the House and, according to information from Bump’s office, these bills would fully reimburse communities for the taxable value of state-owned land. In addition, the bill would create a hold-harmless provision ensuring that cities and towns never see their reimbursement from the state decrease.

The 2020 report from Bump’s office underscores why officials on Friday said the PILOT program for state-owned land must be fixed. According to the report, the program has been underfunded for decades and relies on an annual appropriation to reimburse communities. However, funding has been flat for 20 years. As a result, the Division of Local Mandates estimates that, in fiscal year 2022, the program will be underfunded by roughly $15 million.

Under the program’s funding formula, reimbursements are partly based on each municipality’s state-owned land value. This means communities with decreasing, stagnant or slowly increasing property values have seen reductions in their PILOT payments that the hold-harmless provision would fix.

Another aspect of addressing these needed changes focuses on the policy for distributing money across the state. To gain traction for this change, Bump said the goal is to “speak so loudly they’ll hear us all the way in Boston.” She said “the state has an obligation” as an agent of accountability to make communities whole when their land has been protected from development and limits opportunity for property tax revenues.

Hinds thanked Bump for her work on the report and encouraging action. He said the Pioneer Valley is a perfect example of an area that receives disproportionate funding in state-owned land PILOT payments. Blais also thanked Bump for bringing attention to the subject, and for taking an “independent deep dive” into the numbers, policies and programs that help the legislators argue in favor of the changes.

“We are so lucky not only to have this view, but views like this all across Western Massachusetts,” Blais said, pointing out to the valley below Mount Sugarloaf. “And I think one of the things that has been laid bare here is we are protecting these views, we are protecting this land, but at the expense of our communities.”

Whipps, who was a Selectboard member in Athol for 10 years before becoming a legislator, said she and officials from her district in the North Quabbin area “feel how much (they) give is not recognized by the people in Boston.” According to Whipps, the Quabbin Reservoir provides 412 billion gallons of water to 1.3 million people in the greater Boston area.

“Water which we do not drink,” she added.

Still, the local towns protect the watershed and maintain the open space around it for recreational access.

“We provide an awful lot more than I think Boston gives us credit for, and I think it’s time we remind people their water comes from us, your farmers and my farmers are providing food and, as Senator Comerford who’s not here brilliantly always says, our trees are breathing for them.”

One of the recommendations in Bump’s report for strengthening the PILOT program for state-owned land and increasing its appropriation is to use an aggregate tax rate method to fully fund it. According to the recommendations from Bump’s office, to reach full funding and resolve the concerning effects of the current formula, the Legislature should determine a new appropriation using the Department of Revenue’s former approach of calculating an aggregate tax rate.

“We’ve gotten behind the aggregate approach because it adds basically $5 per $1,000 of value per acre, and that’s significant,” Hinds explained.

According to the report, “this rate is a three-year running average of a ratio representing total property taxes assessed to the total value of property in the state,” and using the aggregate tax rate method would increase reimbursements for all communities in its first year of implementation. Due to the variation in property values and tax levies across communities, using a three-year running average and assigning the same rate to all cities and towns will stabilize reimbursements.

“The aggregate tax rate will cause far less variation in reimbursements than using either residential or commercial property tax rates in the formula and will be reflective of changes in tax collection over time,” the report states. “Another benefit of using an aggregate tax rate is that it will help retain needed (state-owned land) reimbursements among communities with below-average tax rates.”

Hinds noted that another recommendation from the report is that there may be a better approach entirely. The report states “a potential drawback of using this approach is that the rate may disadvantage municipalities with significantly higher tax rates.” State-owned land reimbursements may not be representative of the revenue communities would otherwise generate if the lands were held privately. Furthermore, funding for the program could decrease if the aggregate tax rate goes down, but the report states this can be resolved through the hold-harmless provision in the program.

Zack DeLuca can be reached at zdeluca@recorder.com.


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