iBerkshires coverage of the April 7th event
WAMC coverage of the April 7th event
Berkshire Eagle coverage of the April 7th event
Payment in Lieu of taxes, or PILOT, provides reimbursement to towns and cities for lost revenues from tax-exempt land and property within their boundaries. In rural parts of the state, a major source of PILOT reimbursements are state forests.
Reimbursement payments to towns are based on a complicated formula, which has changed over the years, that includes the appraised value of the property and the latest three-year statewide average tax rate. That’s where the problem begins.
Communities represented by the Woodlands Partnership of Northwest Massachusetts—a public body established in 2018 state law and led by 20 towns in the northwest corner of the state—have been acutely aware of something that has come to be known in Massachusetts municipal circles as the Plymouth-Savoy conundrum.
This prototypical example illustrates the inequity in the current formula by comparing the coastal town of Plymouth and the Berkshire County town of Savoy. Though the two communities have similar acreage in the program through state forests, the PILOT payment for Plymouth is nine times that of Savoy (in FY24, this was $1,210,586 versus $132,040).
In January, state Auditor Diana DiZoglio’s office and the Division of Local Mandates released the report Pursuing Equitable State-Owned Land Reimbursements for Municipalities, which recommends, among other things, a funding floor to address systemic inequity in the PILOT formula.
According to the report, the median reimbursement rate per acre in the state is $127, but there are wide disparities in the rates paid to different communities. In Franklin and Berkshire counties, the median rate is $32 and $33, respectively, with some towns paid far below those levels. Hawley, for example, a town in Franklin County, is paid $10 per acre, while Monroe, another Franklin County town, receives just $5 per acre. At the other end of the state—and the PILOT reimbursement spectrum—Norfolk County’s median payment is $408 per acre.
The valuation of these lands based on property values specific to the communities they are in does not consider the harder-to-monetize benefits these public spaces provide, while simultaneously bringing local impacts and stressors to roads and public safety. What’s being ignored in this calculation are the crucial elements of biodiversity, habitat, carbon, clean water, natural resources, and recreation, among others.
In the frequent discussion around limited financial resources in rural communities, and the resulting increasing and often desperate talks of regionalization as remedy to underfunding for schools, roads, and emergency services, it’s important that this systemic issue be included as both cause of fiscal stress and potential avenue for solution.
The Woodlands Partnership, Auditor DiZoglio, state Sen. Paul Mark, and local officials are convening a public forum on this issue on Monday, April 7, at 1 pm, at Windsor Town Hall.
There have been repeated legislative efforts to rectify the inequity in this program, which would not only provide critical support for small towns lacking capacity and services but would also support the state’s climate and conservation goals, as towns in areas with low reimbursement rates are often indifferent—or even hostile—to additional proposed conservation.
When it comes to legislative efforts, programs that cost relatively little and have great effect on services, such as this one, should be prioritized—especially when such efforts connect to and further broader state and climate goals.
When a small town has only a few hundred people in it, however, and is struggling to provide basic services to its residents, it’s often hard to have that message heard all the way out in Boston.
Dicken Crane of Windsor is chair of the Woodlands Partnership of Northwest Massachusetts. Art Schwenger of Heath is vice chair. Sam Haupt of Peru is chair of the Partnership’s Municipal Financial Sustainability Committee.
