Tax Expenditures Imposed on Local Governments

With regard to tax expenditures, I think it is important that the legislature review and reconsider the many tax expenditures it has imposed on local governments.  Millions of local tax dollars are lost as a result of the huge local property tax breaks private golf courses and public utilities receive.  For example, the Oakley Country Club in 2011 paid only $161,000 in taxes on its 88 acres, a subsidy of over $1.5 million compared to the commercial rate if that land was assessed at its market value.  The Belmont Country Club with its 134 acres received an even larger subsidy.

I would urge you to join with other legislators to relieve localities of this unnecessary burden these state laws impose on their local tax payers.

3 replies on “Tax Expenditures Imposed on Local Governments”

  1. Thanks, Bob. This an important conversation too.

    I guess there are two parts of it:
    (a) local property tax reductions to attract businesses.
    (b) the non-profit exemption from the property tax.

    On the first of these, I tend to take a dim view — we should rarely be doing this. On the second, I favor good contributions by non-profits through payments in lieu of taxes. However, I think it is a political dead end to consider eliminating the non-profit exemption entirely — a lot of very powerful institutions are on the other end of that.

    I’m not sure that I understand the Oakley situation. Have they put a conservation restriction on the land?

  2. Will,

    Thanks for your quick reply. The Oakley situation is a result of the exemption of private golf courses under MGL 61B, which originally was meant to give tax relief on “land which is devoted primarily to recreational use … and is available to the general public….” The following language was added in the early 1980’s to give private golf clubs the exemption – “or to members of a non-profit organization including a corporation organized under chapter one hundred and eighty.”

    Private golf clubs were the beneficiaries of this language because charitable nonprofits, i.e. 501(c)3’s already were exempt from local property taxes. Private golf clubs are 501(c)7 nonprofits – i.e. social and recreational organizations created for the benefit of their members – not for the benefit of the general public.

    I don’t know about the provisions under which public utilities are given exemption from local property taxes, but I do know that it is a major issue for Watertown given the large electric utility installation off of Nichols Ave.

    In any case, these carveouts from local property taxes mandated by state law that benefit only club members, or, in the case of public utilities, shareholders, need to be reviewed.

    1. Well taken.

      I’m going to ask my staff to follow up on this issue. Perhaps this would be a good thing to undertake in the next legislative session.

      Thank you for bringing it to our attention.

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