Payments in Lieu of Taxes, or PILOTs, are incentives given to some developers to encourage building that have become increasingly controversial in Baltimore.
The incentives, which essentially allow a developer to pay a set amount of taxes for a certain period of time to alleviate steep increases in property taxes created by new building and improvements, are unpopular with politically conservative residents, and activists who want to see tax cuts across the board eliminating the need for PILOTs.
Meanwhile, liberal activists, politicians and residents have have characterized the incentives as give-a-ways to developers. Using these incentives to promote development in the city has led some liberals to argue these agreements hurt Baltimore’s ability to fund priorities such as education.
Given the animosity PILOTs generate among some on the political left in the city, it may come as a surprise that Sen. Bernie Sanders, a self proclaimed socialist running for the Democratic Party’s presidential nomination, was an early adopter of the incentives during his time as mayor of Burlington, Vermont.
According to Politico, in a story examining how some of Sanders’ ideas that were considered radical in the 1980s have entered the “municipal mainstream.” One of those ideas was PILOTs, which had been used in liberal Cambridge, Massachusetts since the 1920s. But Sanders use of the tool wasn’t so much as a development incentive as a way to try and generate some revenue from properties owned by nonprofits.
Sanders didn’t invent PILOTs in Burlington. That other people’s republic, Cambridge, Mass, had been receiving them from Harvard since the 1920s, as had other cities since. But he did anticipate an approach that’s become increasingly popular in the Northeast in recent decades as tax-exempt hospitals and universities have swallowed up more and more land and local governments have put the screws on them to pony up more money for city services. — Politico