St. Paul PILOT Project
The committee’s recommendations are complete. Click here for the Final Report
Driving through Saint Paul one easily identifies the Science Museum of Minnesota, the Cathedral of Saint Paul, the State Capitol, the Minnesota History Center, Regions Hospital, and the many higher education institutions. These recognizable and important organizations help form the fabric of Saint Paul with impressive missions and work that add so much to our community. The city has literally grown up with many of these organizations that undeniably contribute to the vibrancy and citizenry of Saint Paul.
While these non-profit organizations are also property tax exempt entities, meaning they don’t pay property taxes because of their government, charitable, religious, or educational missions, they also consume city services like police, fire, and snow removal.
In the past, the City of Saint Paul used right-of-way assessments from all property owners (including tax exempt properties) as a major revenue alternative to property taxes, but the Minnesota Supreme Court recently determined the practice was unconstitutional in First Baptist Church of Saint Paul v. City of Saint Paul. This created a gap in the Saint Paul budget. Of the gap, approximately $1.8 million is revenue previously paid by tax exempt properties.
Should Saint Paul adopt a “payment in lieu of taxes (PILOT) program as other cities like Boston have? Do these Saint Paul property tax-exempt entities have the ability or the willingness to make voluntary civic contributions to help the city? What would work best for everyone in Saint Paul?
These were initial questions before us as we convened a study committee to have a discussion and present the city with findings, conclusions, and recommendations.
We began our study committee process in April and put together a top-notch committee with 23 representatives of key stakeholders from for-profits, non-profits, residential, commercial and industrial property owners, generalists, and experts on the issue.
The committee held thirteen meetings including a city budget presentation, insights from local property tax-exempt and taxable organizations and a presentation from the Lincoln Institute of Land Policy and the City of Boston, an initiator of a major PILOT program.
After looking at the data behind the Saint Paul budget, the legal basis and other PILOT programs across the country, we came to the conclusion that Saint Paul is has a unique opportunity that calls for a uniquely Saint Paul strategy.
The committee is recommending that the City of Saint Paul and its property tax-exempt organizations do what has always worked best in Saint Paul: sitting down together to build a uniquely-Saint Paul partnership and strategy that provides for the future health and vitality of all of the organizations and individuals in Saint Paul. Their fates remain intertwined and their successes remain dependent on each other.
- Nonprofits could pay St. Paul something a lot like taxes, but ask nicely, says task force – Pioneer Press, 9/7/2017
- Citizens League recommends St. Paul explore nonprofit donations to city budget– Star Tribune, 9/6/2017
- St. Paul Considering ‘Voluntary’ Payment Plan for Non-Profits – KSTP, 9/6/2017
- St. Paul looks to colleges, hospitals and nonprofits in a tight budget year – Star Tribune, 7/15/2017
- A good crew to kick the tires on St. Paul’s tax system – Pioneer Press Editorial Board, 5/31/2017
- Rethinking Taxes in St. Paul — (Video) Interview with Executive Director Sean Kershaw, TPT Almanac, 4/14/2017
- St. Paul wants to know if tax-exempt churches, schools would contribute voluntarily to budget — MPRNews, 4/13/2017
- Citizens League panel to help St. Paul study options to pay for city services — Star Tribune, 4/12/2017
- St. Paul: universities, museums, etc., don’t owe taxes, but should they pay in other ways? — Pioneer Press, 4/12/2017
- St. Paul wants to know if its hospitals, universities and museums can be induced — or shamed — into paying more for city services — MinnPost, 4/12/2017
Committee Members & Affiliations
All meetings are open to the public. RSVP required to Sean Kershaw: firstname.lastname@example.org.
Click here for future meetings dates and times. (Subject to change – please RSVP to ensure correct meeting time and location.)
Thursday, August 16, 2017
Thursday, August 03, 2017
Thursday, July 27, 2017
Thursday, July 20, 2017
Thursday, July 13, 2017
Wednesday, July 12, 2017
- The following information was referenced or presented by attendees at the meeting:
Thursday, June 29, 2017
Thursday, June 22, 2017
- Boston PILOT Presentation – St Paul. Updated Version. pptx: A Review of the Program’s Development, Implementation and Results
- Lincoln Land Institute _Kenyon_St. Paul Presentation
- Boston Fiscal Year 2016 Payment in Lieu of Tax (PILOT) Program Results
- Blog: PILOT programs around the country
Thursday, June 15, 2017
- City Of Boston PILOT PowerPoint A Review of the Program’s Development, Implementation and Results
- Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests.December 2010. Daphne A. Kenyon and Adam H. Langley. Lincoln Institute of Land Policy.
- “Nonprofit PILOTs (Payments in Lieu of Taxes).” November 2016. Daphne A. Kenyon and Adam H. Langley. Lincoln Institute of Land Policy.
- “Payments in Lieu of Taxes by Nonprofits: Which Nonprofits Make PILOTs and Which Localities Receive Them.” September 2012. Adam H. Langley, Daphne A. Kenyon, and Patricia C. Bailin. Lincoln Institute of Land Policy.
- “Payments in Lieu of Taxes: The Boston Experience.” January 2013. Ronald W. Rakow. Land Lines. Lincoln Institute of Land Policy.
- “The Charitable Property-Tax Exemption and PILOTs.” August 2012. Evelyn Brody, Mayra Marquez, and Katherine Toran. Urban Institute.
- “Mayor’s PILOT Task Force: Final Report and Recommendation.” 2010. City of Boston. Website includes report and other resources.
- “Tax-Exempt Properties Rise as Cities Cope with Shrinking Tax Bases.”November 2012. Mike Maciag. Governing.
- “The Property Tax Exemption for Nonprofits and Revenue Implications for Cities.” November 2011. Daphne A. Kenyon and Adam H. Langley. Urban Institute.
- “The 21st Century Fight Over Who Sets the Terms of the Charity Property Tax Exemption.” June 2016. Evelyn Brody. The Exempt Organization Tax Review.
- “Assessing the Nonprofit Property Tax Exemption: Should Nonprofit Entities be Taxed for Using Local Public Goods.” May 2012. Joseph J. Cordes. In Value Capture and Land Policies.
- Memorandum of Understanding with respect to Voluntary Payments to be Paid to the City of Providence, Rhode Island by Brown University and Rhode Island School of Design and Providence College and Johnson & Wales University. June 5, 2003.
- CITY OF SAINT PAUL PILOT RECEIPTS AS OF 2017.
- Blog: Concerns Aired Surrounding Potential PILOT Program
Thursday, June 1, 2017
Thursday, May 18, 2017
Thursday, May 11, 2017
- Scope is limited to whether or not a ‘payment in lieu of taxes’ and/or ‘services in lieu of taxes’ (PILOT/SILOT) model is advisable, and how the program would be structured and sustained if so.
- Committee may determine that either idea is inadvisable. The outcome is not predetermined.
- Scope does NOT include questions related to ‘right of way’ services that the city will assess against all properties in 2017.
- Committee would need to determine which types of entities would be included in any potential program.
- The Committee has the ability to refine the scope once it’s started its work.
- Structure will include representatives from key stakeholders on this issue: a range of for-profits, nonprofits, property owners, and both generalists and experts on this topic.
- Citizens League board has final determination of membership of the committee, and the committee is an independent project of the Citizens League.
- City of St. Paul employees/representatives will provide background and information, and can observe the deliberations and testify, but not formal committee members.
- Meetings will be open and schedules available publicly.
- Proposed outcomes:
- Findings: Shared understanding of the facts, data and local/national trends on this issue. Goal is to make these findings accessible and relevant to broader public.
- Conclusions: Shared set of statements and questions related to the implications of these findings. Why do they matter to the citizens of St. Paul and the region?
- Recommendations: Proposed set of actionable recommendations IF changes are needed to address current situation. (Committee could decide status quo is sufficient.) Given timeline below, recommendations might come in phases.
- Base of support for implementation: Buy-in from key stakeholders needed to advance and sustain any potential recommendations.
- Timeline and time commitment:
- Anticipated nine (9) two-hour meetings, starting at 7:30 am.
- Goal is to have final proposal, or first phase of recommendations, ready by August 2017, in time for 2018 budget deliberations.
- $41,000 budget
- Majority of funding from St. Paul Foundation and Bigelow Foundation approved. Additional funding is still being sought.
Questions: Sean Kershaw, Citizens League Executive Director, email@example.com.