Menino to nonprofits: Pay up!

City’s Payments in Lieu of Taxes program has MFA and other arts and education institutions asking questions

I was on my way to dinner last week when I stopped in on Museum of Fine Arts director Malcolm Rogers’s Lowell Lecture at the Boston Public Library. It was an interesting presentation, sadly underattended. The talk warmed up about halfway through when Rogers started griping about the city’s “lack of vision’’ where the MFA’s finances were concerned. Specifically, Rogers was venting about Boston’s unsubtle tax shakedown directed against nonprofits, called the PILOT program, for Payments in Lieu of Taxes.

I bearded Rogers after his talk, expecting him to back off his tough rhetoric. But he stayed steamed, in a buttoned-down English way. The city had just jacked up his annual PILOT payment from $66,000 to $250,000, and was planning to tag him for a cool million down the road. The veiled threat to nonpayers is that the traffic light outside the main entrance won’t get fixed, or the key side street leading to the staff garage won’t be plowed, and so on.

The MFA is a huge economic driver in Boston, Rogers observed, and then invoked the examples of New York City and Los Angeles, both of which subsidize their major art museums - the Met and the LA County Museum of Art - with over $25 million a year. That’s right, says New York’s Department of Cultural Affairs spokeswoman Danai Pointer: “The city recognizes that the arts play an important role in the distinct identity of all the boroughs, and make an important contribution to tourism and the economy.’’

Ouch.

Boston has been exacting the “voluntary’’ PILOT payments from nonprofits for quite a while, with the big universities and the hospitals bearing the brunt of Mayor Tom Menino’s tough love. The rationale isn’t hard to understand. The city delivers services, such as fire and police protection, and street maintenance, to the nonprofits for free. As charities, they are exempt from taxes. Boston has less dough than ever, so it has been jacking up the PILOT payments accordingly.

The nonprofits have been complaining that Menino exacts tribute on an arbitrary basis, with City Hall darlings such as Northeastern University and Suffolk University paying less, and the big players, such as Harvard and Boston University, paying more. If you look at some of the gobbledygook posted at Cityofboston.gov, that’s not exactly true. The current formula tries to ape a conventional property tax. If you put an addition on your house, its value increases and your property tax goes up.

WGBH built a fancy new headquarters in Brighton, and the city jacked its suggested PILOT up to $259,000, from $51,000. Rogers has made huge improvements to the MFA, including the new Art of the Americas Wing and the Linde Family Wing for Contemporary Art. He thought those investments might win some love from Menino & Co., but all it got him was a higher tax bill. “It came as a shock to us at the cultural institutions,’’ Rogers said. “We were not around the table when these decisions were made.’’

What’s harder to explain is why anyone pays at all. There is no statutory basis for taxing nonprofits - quite the contrary - but no one has yet taken the city to court on the PILOT program. A plaintiff with a smart lawyer could win - and alienate City Hall forever.

Curiouser still, the nonprofits prefer to hang separately rather than form a coalition to negotiate with the mayor. Practically every college, hospital, or art museum has some urban bigshot on the board of directors who supposedly has juice in the mayor’s office. (Menino himself is an MFA trustee, although he hasn’t attended a meeting in at least 17 years.) Some institutions - Harvard and Boston College, for example - squawk more than others. But when push comes to shove, most of them pay pretty close to what the mayor asks.

Mark Volpe, managing director of the Boston Symphony Orchestra, actually got his PILOT reduced, from $83,000 to $78,000. “We already pay over $450,000 in property taxes on our commercial property and over $200,000 on police details,’’ he said. “Plus we were serving the city with free youth concerts in both Boston and Tanglewood. But our PILOT was two or three time greater than Northeastern’s.’’

“My issue wasn’t so much, ‘We need to have our PILOT reduced.’ It was more that it had to be based on some real numbers and we had to get credit for community service.’’

The first installment of Menino’s baksheesh is due Monday. When I spoke with Rogers, he and the MFA board hadn’t yet figured out a PILOT strategy. Would they sue? “Not at this stage,’’ Rogers said. “It’s not a legal claim; it’s a moral claim. It’s a matter of having a culture that invests in cultural institutions rather than taxing them.’’