A Museum "Tax" in Boston?

January 10, 2012

The Mayor of Boston, Thomas Menino, has announced plans for a new Payment in Lieu of Taxes scheme (“PILOT”). Under the scheme, non-profit organizations are tax-exempt but must pay certain amounts toward City services in order to retain certain privileges that come with their non-profit status. Organizations that will be affected by the revised rules include museums, universities, and even medical centers.

According to the PILOT website, Menino created a Task Force in 2009 “to examine the relationship between the City and tax-exempt institutions.” The City has been looking to raise extra funds, at least because of recent cuts to state aid from Massachusetts. However, the recommendations of the Task Force have been met with skepticism. Michael Rezendes at the Boston Globe writes, “this marks a major change to a system that feels to some organizations uncomfortably close to tax bills.”

What will this alleged “tax” amount to for museums? It is reported that The Museum of Fine Arts will be asked to pay $250,000 next year, and more than $1 million in five years. These numbers represent a steep increase from this year’s contribution of about $66,00.

In Judith H. Dobrzynski’s opinion, “Menino seems to be penalizing museums for success: MFA’s fee is rising, as is the Institute for Contemporary Art’s, because they’ve successfully expanded.” The proposed plan is “like a real estate tax assessment.”

The Art Newspaper reports that the Task Force recommended that discount credits be made available, “according to the benefits that [the institutions] provide to the Boston community.” It sounds nice, but would cultural institutions be eligible for such discounts? How should “community benefits” be measured? Erica Cooke suggests that demonstrating the community benefits provided by universities and hospitals may be “easier to quantify” than the benefits provided by museums.

Museum of Fine Arts director Malcolm Rogers warns that the new PILOT plan “will mean cuts to the MFA’s outreach programs, as well as job cuts.” According to The Boston Globe, Rogers stated further, “To preserve a quality of life that enriches the community we need to foster a culture in Boston and across America that invests in cultural institutions, rather than taxes them.”

It goes without saying that Cities and their cultural institutions have a symbiotic relationship. Without a well-maintained City, a well-maintained museum seems rather pointless. But does Boston’s new plan strike a fair and mutually beneficial balance? Is this plan something other Cities should consider adopting?

Read more at The Art Newspaper: This is Not a Tax, Says Boston’s Mayor