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BU’s financial benefits to Boston detailed in recent report
By Brian Fitzgerald
In terms of town-gown relations, BU has much more to offer Boston than just brainpower, according to a recent report. Indeed, the University generates money for the city — and lots of it.
The benefits to the city from BU in direct payments and services totaled $34.8 million in fiscal year 2004 — up from $33.5 million in FY 2003.
Compiled by BU’s Office of Analytical Services, Benefits to the City of Boston from Boston University details amounts generated from such revenue-savers as scholarships to Boston residents, subsidies to Boston Medical Center, BU Physical Plant services to the city — such as snow and litter removal — and donated use of athletics and recreational facilities to Bostonians.
Although BU is a nonprofit institution and therefore legally exempt from property taxes, the annual document lists a plethora of direct payments and services, including nearly $3.2 million a year under the city’s Payment in Lieu of Taxes (PILOT) program. In comparison, Boston College contributes almost $215,000 under the PILOT program. The Berklee School of Music kicks in more than $175,000, and Northeastern University’s contribution is just under $137,000. “BU is clearly the leader among educational institutions in the PILOT program,” says Ronald Rackow, Boston’s commissioner of assessing.
“Over the last 30 years, Boston University has worked to create a coherent campus by buying contiguous property,” says Richard Towle, senior vice president. “We didn’t want that to be seen as adverse to the interests of the city and its citizens, so we make voluntary contributions to the city.”
Despite its tax-exempt status, BU does pay some real estate taxes — on property that isn’t used for educational purposes. In addition, the University gives Boston linkage payments as a result of agreements with the city for major construction projects, such as the School of Management and the Photonics buildings. Since 1981 Boston has collected nearly $76 million from BU in real estate taxes and linkage payments.
“When we buy a property that was previously on the tax rolls, our agreement with the city is that we pay what the previous owner was paying in taxes, subject to inflation,” says Towle. “If we redevelop the property for another use, we make voluntary payments through the PILOT program.”
The report is separate from BU’s annual economic and social impact sourcebook, which is released in the spring. The sourcebook, entitled Making a Difference in Massachusetts, describes the University’s economic impact on the local and state economy, which came to more than $2.8 billion in FY 2003. Of that amount, the total in Boston was nearly $1 billion. These estimates are based on regional input-output multipliers developed by the U.S. Department of Commerce.
It’s impossible to put a dollar amount on many of BU’s contributions to the city, from literacy programs in elementary schools to free cultural opportunities such as art exhibitions and music performances. However, the report lists a monetary value of some BU services in FY 2004 — more than $7 million in scholarships to Boston residents, more than $1.6 million in street cleaning, snow removal, and sidewalk repair, and $213,000 in donated use of athletics and recreational facilities, including $24,000 in free Terrier basketball tickets to community centers.
“We try our best to be good neighbors,” says Towle.
25
February 2005
Boston University
Office of University Relations