NORTHAMPTON — The Cooley Dickinson Health Care trustees said Friday they will donate $30,000 to the city of Northampton, with annual $10,000 installments, through 2018.
However, this is not to be misconstrued as an endorsement of a payment in lieu of taxes program, hospital officials said. The PILOT program exists so that tax-exempt institutions may compensate municipalities for a portion of their property value.
“It is our hope that the additional $10,000 per year cash contribution will be used for public health initiatives, which align with the mission of Cooley Dickinson Health Care,” Joanne Marqusee, president and CEO of Cooley Dickinson Health Care, said in a statement.
Mayor David J. Narkewicz presented his plan for a payment in lieu of taxes program, designed to be phased in over five years, to the City Council last fall and called on 10 of the city’s largest nonprofit, tax-exempt property owners to voluntarily contribute to the city.
That translates to asking for a portion of what they would owe if they paid property taxes. Ultimately, nonprofits would be expected to contribute 5 percent of their bill if they paid property taxes, above the first million in property valuation, under the mayor’s plan.
Though Cooley Dickinson declining to be part of the PILOT program was not the outcome the mayor had hoped for, its donation is appreciated nonetheless, Narkewicz said Friday.
“I’m thankful to Cooley Dickinson for considering the city’s request for a voluntary payment in lieu of taxes payment,” Narkewicz said. “And I appreciate their commitment of $10,000 in FY2016 as well as their commitment over the next two years.”
“I’ve always emphasized that payment is voluntary,” he added.
Northampton faces a special set of challenges because of the “inordinate amount of property that’s tax-exempt,” Narkewicz said. Provided the size of the tax base, “it’s a combination of this and increased reliance of property taxes to fund municipal services.”
So far, the mayor has heard back from three of the 10 nonprofits he reached out to. The other two, Smith College and Hampshire Regional YMCA, also declined to offer payments in lieu of taxes.
Like Cooley Dickinson, Smith College did, however, make a voluntary payment of $100,000 for the fiscal year ending June 30, and also agreed to pay the same amount in fiscal years 2017 and 2018, according to correspondence between the college and Narkewicz’s office. Had Smith College agreed to the voluntary payment, it would have amounted to about $245,857 for the current fiscal year.
Smith College officials could not be reached for comment on Friday.
Michael Majchrowicz can be reached at mmajchrowicz@gazettenet.com or 413-585-5234.