Add Morgantown, West Virginia to the PILOT list

Big news from Monongalia County, West Virginia  (and I don’t mean its party school ranking of number 2… ), but add West Virginia University to the list of charitable institutions making PILOT (payment in lieu of taxes) payments.  WVU has done a significant amount of development in downtown Morgantown (yes, we have a downtown…) through private-public partnerships.   As a result, a good deal of private property has gone off the tax rolls in this standard issue university town. 

Of course, the issue of PILOTs has received a significant amount of discussion as of late (including on this website), as strapped state and local communities look for alternative sources of revenue.  For more information, I strongly recommend starting with the Urban Institute website, which has a number of studies on PILOT issues (many of which are authored or co-authored by Evelyn Brody.)  In that regard, this really shouldn’t be much in the way of new ground… but…

(I am totally dating myself here…)

What I find interesting is that WVU is a public university.   I’ve been searching on the interwebz (to no avail) for more information on how many public institutions – presumably, universities and hospitals – have agreed to PILOTs.  (Anyone have any info?  I found this helpful article by Langley, Kenyon and Bailin from the Lincoln Institute of Land Policy, circa 2012, that has a number of appendices – a very quick review doesn’t seem to show any public institutions.)   Part of the rationale for a private nonprofit to enter into a PILOT agreement and voluntarily pay not-taxes is that the alternative could be much, much worse.  If a government changes the applicable laws granting nonprofit property tax exemption, the nonprofit will have little control over what happens next, so the devil you know and negotiate is probably better than what is behind Door Number 2.  

I would think that with a public university, that calculus would be much, much different.   After all, a public university is branch of government, it seems as if it would be much more difficult to muck with the property tax exemption for the University itself – both legally and politically.  According to the press release from WVU, its 50 year payment agreement applies only to “private commercial establishments operating on University property for activities that are not a critical part of or integral to serving the academic needs of students.”  Therefore, while there may be limits on the ability to change the University’s tax exemption, query how much play actually exists with attacking the property tax exemption for the University’s leased property?   (see section 10 versus sections 14 or 17, for example).

EWW