Sens. Comerford, Hinds want changes to PILOT program

  • Hemingway Road in Wendell State Forest. STAFF FILE PHOTO

  • Access point to Wendell State Forest. STAFF FILE PHOTO

  • Wendell State Forest STAFF FILE PHOTO

Staff Writer
Published: 6/3/2019 10:55:11 PM

Senators Adam Hinds and Jo Comerford want to create a statewide commission to review the formula for the Payments in Lieu of Taxes program for state-owned land, and their colleagues have voted to adopt their budget amendment to do so.

“Cities and towns in my district have long relied on PILOT payments to offset costs associated with stewarding tax-exempt state-owned land,” said Comerford, D-Northampton. “I have heard from the towns of Wendell, Gill and more — all of which have large percentages of conservation land.”

Comerford said much of her district and Hinds’ district is “literally breathing for the state as it is the epicenter of the commonwealth’s state-owned forests.”

The new state Department of Revenue formula pits small towns that have a significant percentage of non-taxable state-owned land and stagnant land values against cities and towns in the eastern part of the state, which has land that has continuously increased in value, she said.

Hawley, Sunderland, Warwick and Wendell are just a few of the towns in the county that have state-owned land within their borders.

The PILOT program is the method the state uses to compensate communities with tax-exempt state-owned land within its borders. The DOR’s formula and process for assessing the value of that land changed last year, causing cuts in projected payments to many towns.

To determine PILOT payments to cities and towns, the DOR, through the Bureau of Local Assessment, determines the fair cash value of tax-exempt state-owned land and sets a base valuation at each municipality’s reimbursement level. Then, it adjusts the base valuation every two years to reflect increases in the equalized cash value. Using that formula, if the value of state-owned land does not change in a particular town, but the value of other state-owned land increases elsewhere, the first town’s reimbursement is reduced, so, as property values increase in other parts of the state, they are on the decline in western Massachusetts.

“We must re-examine the PILOT formula so that it ensures regional equity,” Comerford said.

Hinds, D-Pittsfield, said the PILOT formula is flawed, not providing fair or adequate reimbursements to communities that host state-owned forests.

“Many of the towns I represent, especially in southern Berkshire and western Franklin County, are rural and rely upon PILOT and property taxes as their only revenue streams to support municipal operations,” Hinds said.

The state senator said he would like to see an increase in the amount paid to towns and cities, and changes to how it is dispersed.

“Many of my towns are 40, 50, even 60 percent state-owned land,” Hinds said. “That land is taken off the tax rolls, so they count on this money.”

He said the current formula devalues large blocks of land in the towns he represents. For instance, two towns in his district have the same acreage of state-owned land but receive “drastically” different amounts based on the value of the land in each town.

“It’s the same forest, but land is valued differently in each town,” he said. “That’s not fair”

Hinds said he’d like the commission — if the House and governor agree to create one — to create a new formula. He said his towns collectively lost $78,000 in this year’s budget, and some towns and cities get tens of thousands of dollars less than he believes they should get.

The senator said he is grateful that his Senate colleagues recognize the need to review the PILOT formula to make sure it is providing the assistance host communities are due. It is the second year in a row Hinds sponsored such an amendment — it was not included in last year’s final budget. Comerford, who is serving her first year, joined him this time.

Hinds has also filed the amendment as standalone legislation as Bill S 1861, which is currently under review by the Joint Committee on State Administration and Regulatory Oversight.

The amendment filed by the two will create a commission to study the valuation and distribution of payments in lieu of taxes. The commission will consider the current methods used to determine valuations, evaluate the effectiveness and regional equity of the formula, consider the extent to which the formula reflects the needs of municipalities and the proportional distribution of payments and the economic impact on local communities.

The commission will then make recommendations to the Legislature to establish a formula that considers current needs of municipalities.

The Senate budget is headed to a conference committee to be reconciled with the House budget before it goes to the governor.

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