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Law Favoring Nonprofits Has Stranglehold on Worcester’s Destiny

Friday, December 19, 2014

 

The Dover Amendment is a Massachusetts law that allows religious and educational institutions the ability to build facilities without having to adhere to zoning laws. These institutions are also not required to pay property taxes to the city. 

According to a 2005 report by a task force formed by former Mayor Tim Murray, over a ten year period between 1995 and 2005, the city lost 116 properties off of its tax roll following the purchase of the properties by non-profit organizations. The tax loss amounted to nearly $12 million. 

Former Mayor, and current President of Worcester’s Chamber of Commerce, Murray initiated a Social Service Task Force of 15 community members. The task force was to look at the siting of nonprofit organizations and "examine ways to prevent erosion of the city's tax base with the acquisition of properties where programs had been located."

Nearly ten years later, nothing from the task force's report has been adopted.

According to some members of the City Council, the Dover law is negatively impacting the city of Worcester and it is impeding the city’s progress. The larger a nonprofit gets, the more space it needs and the more property it can purchase without being taxed on it. On Tuesday night, City Councilors voiced their opposition to the Dover Law.

“We have 30 percent, more or less, of properties that are non-taxable. Seven years ago that was closer to 20 percent. Who knows what that percentage will be ten years from now? When those properties come off the tax roll, it’s up to the rest of us to make up the difference,” said City Councilor Morris Bergman.

Cambridge Exempt from Dover Law

City Councilor Phil Palmieri said, “One of the troubling aspects of the Dover amendment is how it impacts our city. Are we adversely impacted by the Dover amendment? I think we are. And it’s very troubling. We don’t control our own destiny.”

Bergman argued that the city should look into the steps it took the city of Cambridge to exempt itself from the Dover Amendment in 1979, and how Harvard University exempted itself in 1981. There are 351 cities and towns in Massachusetts and only Cambridge is exempt from the Dover Amendment.

In Cambridge, tax exempt institutions have to go before a zoning board like a for profit business. This, Bergman argues, has a measure of control over these institutions expanding throughout the city.

“Cambridge is no longer a subject of the Dover amendment,”said Bergman. “They can tell Harvard University, MIT, and everyone else that if you want to buy a piece of property, you have to go through zoning and neighbors may object and you’ll have a hard burden to overcome.”

Palmieri said, “I don’t think it helps that we have the Dover amendment. This is an albatross. It’s a problem. Our delegation should be listening a little more and trying to help.”

“As a city, we do all the things that are expected of us. We go above and beyond in a lot of cases. We have more than our responsibility of maintaining refugee immigrants. We do more on affordable housing and Section 8 housing than many cities. We have a lot of nonprofits that don’t pay taxes. And we’re a major city. Those are all good things for us to do because we want to do the right thing, but we also want to be able to control our destiny,” said Bergman.

Murray Attempted to Implement Program in 2005

Gary Vechhio, a member of Murray's Social Service Task said, "That report was the basis that (former City Manager) Mike O’Brien used to negotiate pilot payments with Mass College of Pharmacy, WPI and Clark. It just never went beyond that which is a shame. It needs to be implemented."

The report called for non-profits to pay 18.26 percent of what their total tax pay would be. That percentage accounts for police protection, fire protection, code inspection, DPW, and the communication division in the city. At the time, 18.26 percent was the percentage of the city’s budget those departments took up.

“In the report, we say that nonprofits should be asked to pay that percentage. Of course, we would be happy with anything they pay. Anything is better than nothing," said Vecchio.

 

Related Slideshow: Bureau of Economic Analysis: Real Personal Income Data for New England Municipalities, 2008-2012

The U.S. Department of Commerce released "real personal income" data for both all the states, as well as metropolitan area,  from 2008 to 2012. 

Below are the New England metro areas ranked from least personal income growth from 2011 to 2012 -- to the most, as well as prior years.

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14. Lewiston-Auburn, ME

Real Personal Income - Percent Change

2011-2012: -0.62

2010-2011:  1.89

2009-2010: -1.73

2008-2009: -0.17

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13. Bangor, ME

Real Personal Income - Percent Change

2011-2012: -0.36

2010-2011:  0.82

2009-2010: -0.84

2008-2009:  1.99

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12. Norwich, CT

Real Personal Income - Percent Change

2011-2012: 0.62

2010-2011: 0.88

2009-2010: 0.75

2008-2009: -1.25

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11. Pittsfield, MA

Real Personal Income - Percent Change

2011-2012: 0.64

2010-2011: 3.82

2009-2010: 1.40

2008-2009: -3.56

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10. Worcester, MA

Real Personal Income - Percent Change

2011-2012: 0.94

2010-2011: 2.80

2009-2010: 2.31

2008-2009: -0.30

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9. Manchester-Nashua, NH

Real Personal Income - Percent Change

2011-2012: 0.96

2010-2011: 3.02

2009-2010: 1.63

2008-2009: -1.44

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8 . Portland, ME.

Real Personal Income - Percent Change

2011-2012: 0.99

2010-2011: 2.74

2009-2010: 0.59

2008-2009: -1.21

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7. Hartford, CT

Real Personal Income - Percent Change

2011-2012: 1.61

2010-2011: 0.86

2009-2010: 0.93

2008-2009: -1.87

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6. Barnstable, MA

Real Personal Income - Percent Change

2011-2012: 1.70

2010-2011: 6.00

2009-2010: 2.34

2008-2009: -2.04

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5. Providence, RI

Real Personal Income - Percent Change

2011-2012: 1.81

2010-2011: 1.56

2009-2010: 2.53

2008-2009: -1.15

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4. Burlington, VT

Real Personal Income - Percent Change

2011-2012: 1.86

2010-2011: 5.54

2009-2010: 0.91

2008-2009: -1.39

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3. Bridgeport/Stamford CT

Real Personal Income - Percent Change

2011-2012: 1.93

2010-2011: 5.00

2009-2010: 5.29

2008-2009: -8.47

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2. Springfield, MA

Real Personal Income - Percent Change

2011-2012: 2.06

2010-2011: 2.38

2009-2010: 0.95

2008-2009: 0.34

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1. New Haven/Milford, CT

Real Personal Income - Percent Change

2011-2012: 3.06

2010-2011: 1.07

2009-2010: 1.13

2008-2009: -0.88

 
 

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