Baltimore’s Major Nonprofit Institutions Agree to Increased Payments to City

Baltimore, MD – Baltimore City and 14 of its largest nonprofit anchor institutions have reached a new agreement regarding Payments in Lieu of Taxes (PILOTs) for fiscal years 2027 through 2031. This agreement is expected to significantly increase the financial contributions these organizations make to the city’s general fund over the next five years. The involved institutions include prominent healthcare providers and educational facilities such as Johns Hopkins Hospital, the University of Maryland Medical Center, Loyola University Maryland, and the Maryland Institute College of Art.

Under the terms of the new PILOT agreement, the annual contribution from these 14 institutions will see a substantial increase. Historically, these organizations have contributed between $1.4 million and $6 million annually to the city under previous PILOT agreements. The new accord aims to double their current annual investment within three years, escalating from $6 million in 2027 to $12 million by 2030. This phased approach to increased payments is designed to allow the institutions to adapt to their new, higher financial obligations to the city. The agreement also acknowledges the financial pressures faced by these institutions, particularly in light of federal funding reductions affecting healthcare and educational sectors, with a specific consideration for smaller organizations like Grace Medical Center and the Maryland Institute College of Art. The PILOT agreement is set to be renegotiated again in fiscal year 2031.

Beyond the PILOT payments, these 14 institutions collectively contribute an additional $29 million annually in various taxes and fees to the city. Their financial support extends to other city services, with $19 million allocated for community safety initiatives, $7 million for waste management, and $2 million for the maintenance of public rights-of-way. These institutions are a cornerstone of Baltimore’s economy, often referred to as “meds and eds,” providing a significant portion of private sector employment within the city. Collectively, they employ 71,000 individuals, representing one out of every four private sector jobs in Baltimore. This substantial workforce contributes an estimated $57.6 million annually in local income taxes alone. In 2024, their direct investments in Baltimore amounted to approximately $652 million, supporting a range of critical areas including public schools, economic development projects, arts and cultural programs, and community health services.

If economic conditions remain stable, the cumulative financial contribution from these institutions to Baltimore’s General Fund over the next five years is projected to reach $481 million. This total includes the aforementioned annual PILOT contributions, as well as local income taxes, parking taxes, energy and utilities taxes, and various other miscellaneous fees. It is noteworthy that these contributions exceed requirements for similar institutions with PILOT agreements in other cities. The agreement highlights the vital role these anchor institutions play in the city’s financial health and community well-being, underscoring their commitment to Baltimore’s ongoing development and the welfare of its residents.

Article by Mel Anara, based upon information from the Office of Mayor Brandon M. Scott

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