Harvard University is situated in Cambridge and Boston. Due to a longstanding but slightly strange arrangement Harvard and other university (eg.Yale, Princeton, Columbia) do Not pay any property taxes in the cities in which they are located. The income which cities receive from property taxes is what they use to provide services such as Fire Dep’t, Police Service Public schooling etc.
Obviously the Universities are not excluded from using these services; if they have a fire on site the City Fire Dep’t turns up just as it would for any other property owner who had paid his tax. As public awareness of this obviously unfair arrangement grew the universities came to a deal with the various cities. The deal is known as the PILOT, Payment In Lieu Of Tax and is entered into by the universities on a Voluntary basis!
Harvard just happens to be the richest university in the world, its investment portfolio is valued between $33 & $36 Billion and the value of its buildings in Boston was reckoned to the $1.5 Billion. If they paid property taxes at the same rate as other city property owners, their bill would be $47 Million. However under PILOT they agreed/got away with a figure of $10 Million.
But it didn’t finish there, Harvard reckon they make a contribution-in -kind to the city by maintaining their beautiful university grounds which the public can enjoy and likewise the public can apply to join their extensive stocked library. The value they put on this is $5 Million so the final amount agreed that they should pay the city was $5 Million, a long way from a normal taxed figure of $47 million.
It reminds me of Robin Hood, but in reverse; the majority of the community pay taxes to subsidise the privileged few. Oh, in case you feel the $47 Million is too steep, the last available figures shoe that Harvard had an annual income from dividends, rents & student fees of $4.5 Billion !