Elmira's two largest property owners — a hospital and a college — pay zero
in property taxes. Together they hold over $88 million in assessed property value
and use city roads, fire protection, and water every day. There is a tool to
address this. It has not been used.
What Is a PILOT?
A PILOT (Payment in Lieu of Taxes) is a negotiated agreement between a city
and a tax-exempt organization. It is not a tax — it's a voluntary payment.
The simple version: State law says hospitals, colleges, churches,
and most nonprofits don't pay property tax. Elmira cannot change that law. The
city cannot send Arnot Health a tax bill — the exemption is baked into state law
and cannot be overridden locally.
What the city can do is ask. A PILOT is a separate agreement —
negotiated between the city and the institution — where the institution
voluntarily agrees to contribute something toward city services. It might be
cash, it might be in-kind services, it might be tied to specific programs.
The institution keeps its tax exemption. The city gets revenue it otherwise
would never see.
Other cities have done this. Cornell University pays Ithaca $4 million
a year under a voluntary MOU (2023). Yale pays New Haven over $23 million.
Johns Hopkins and other Baltimore nonprofits pay the city under a PILOT that
is rising from $6M to $12M a year by 2030. Elmira has no such agreement with
Arnot Health or Elmira College.
$339.6MFully exempt assessed value 656 parcels in Elmira — zero property tax
38.9%Share of the city's total assessed value that generates no tax revenue
$0Current PILOT revenue from Elmira's largest non-governmental exempt entities
Why the city raises tax rates instead
When the city needs more revenue, the path of least resistance is to raise the
tax rate on the existing taxable base. This produces immediate, predictable revenue
without the political difficulty of reassessment or the negotiation required for PILOTs.
The cost lands on the same taxable parcels — disproportionately working-class homeowners
and small landlords — while exempt institutions and frozen long-time owners are shielded.
A PILOT agreement with Arnot Health, by contrast, would require sustained political
will over years of negotiation, and any payment Arnot agrees to make is likely to
be far below its theoretical tax liability. But the alternative — continuing to
raise rates on a shrinking taxable base — is a spiral that eventually becomes
unsustainable.
Who Pays Nothing
The table below shows Elmira's major fully-exempt institutions, their 2025 assessed
values, and a modeled tax liability using approximate rates. Theoretical bills are
shown for illustration — these entities have no legal obligation to pay them.
About the rate estimate: Property tax bills in Elmira combine three
levies: the City of Elmira ($18.49 per $1,000 of assessed value in 2025), plus the
Elmira City School District and Chemung County levies on top. The combined rate used
below — approximately $53.50 per $1,000 — is an estimate consistent
with the reassessment
scenario on the Elmira page; readers should verify against the city's published
tax rates for the current year. All figures use 2025 assessed values as reported on
the assessment roll.
Institution
Category
Assessed Value
Theoretical City Bill ($18.49/$1,000)
Theoretical Combined Bill ($53/$1,000)
Notes
* State-owned parcels (prison, state facilities) are in a different category: NY State
pays Aid and Incentives for Municipalities (AIM) payments to cities, which partially
compensate for state-owned tax-exempt property. These are not PILOTs and the amounts
bear little relationship to theoretical tax liability. † IDA-held apartment complexes
typically have existing PILOT agreements as a condition of the development deal,
though amounts vary. Municipal utility parcels (Water Board) are excluded from the
PILOT discussion as a matter of convention.
Arnot Health System in Focus
Arnot Health is Elmira's largest non-governmental, non-prison tax-exempt property
owner. It is also a $900M-revenue regional health system that uses the city's
infrastructure every day.
Arnot Health operates Arnot Ogden Medical Center (600 Roe Ave) and
St. Joseph's Hospital (555 St. Joseph's Blvd) — both in the City of Elmira — plus
Ira Davenport Memorial Hospital in Bath, and numerous outpatient and specialty clinics
throughout the Southern Tier.
The health system's primary operating entity (Arnot Ogden Medical Center) reported
revenues of approximately $457 million in its most recent
Form 990 filing (FY2024),
in which CEO compensation topped $1 million. The organization's tax-exempt status
rests on its status as a non-profit under RPTL §420-a and IRS 501(c)(3).
~$54.4MArnot system exempt assessed value 47 parcels in City of Elmira, city_taxable = $0
~$1.01MTheoretical annual city tax bill at $18.49 per $1,000 — never collected
~$2.91MTheoretical combined tax bill city + school + county
$0Current annual PILOT payment no agreement in place
The "community benefit" requirement
Non-profit hospitals are required under the Affordable Care Act and IRS regulations
to conduct Community Health Needs Assessments (CHNAs) every three years and publish
community benefit reports documenting what services they provide in exchange for
their tax exemption. Arnot Health's community benefit report — available publicly —
is the institution's own accounting of why its exemption is justified.
Community benefits typically include charity care (unreimbursed medical care for
uninsured or underinsured patients), Medicaid shortfalls, medical education, and
community health programs. The debate between municipalities and hospitals often
centers on whether these community benefits are genuinely additional — things that
wouldn't otherwise be provided — or simply the cost of doing business that a
for-profit hospital would also incur.
A PILOT negotiation with Arnot would likely involve Arnot pointing to its community
benefit spending as a de facto payment. The city's counterargument is that community
benefits are largely reimbursed (Medicaid, Medicare), that they benefit the entire
region not just Elmira taxpayers, and that the city's roads, sewers, water, and fire
services are costs that Arnot's tax exemption doesn't offset.
PILOT scenarios for Arnot
$101K/yr10% of theoretical city bill
Minimal — covers barely more than city administrative overhead
$252K/yr25% of theoretical city bill
Modest — comparable to a small capital project funded annually
$503K/yr50% of theoretical city bill
Meaningful — ~5% of Arnot's theoretical full tax liability recurring annually
Revenue Scenarios — All Non-Governmental Exemptions
If Elmira secured PILOT agreements with all of its major non-governmental, non-prison
exempt institutions — health care, education, and civic — at various payment rates,
here is what the aggregate city-only revenue would look like.
$220K/yr10% PILOT — all non-governmental exemptions
Arnot + College + LECOM + Clemens
$550K/yr25% PILOT — all non-governmental exemptions
$1.10M/yr50% PILOT — all non-governmental exemptions
For context: Elmira's total city budget is approximately $40–47M
per year (2025–2026). A 25% PILOT on all non-governmental exempt properties would
add roughly $550,000 annually — not a budget transformation, but not trivial either.
At 50%, the contribution reaches $1.1M annually, equivalent to the proceeds of a
roughly 2-point increase in the city tax rate — without touching a single
homeowner's bill. The recurring, predictable nature of a PILOT is also meaningful:
unlike one-time grants or fund transfers, it compounds over years into a reliable
revenue stream.
These projections use the city levy only. A PILOT structured to cover school and
county portions would be substantially larger but would require coordination with
the school district and county government — a more complex negotiation.
How Other Cities Have Done This
PILOT agreements between municipalities and large non-profits are common in
college and hospital towns across the country. They range from token gestures
to substantial recurring revenue.
The common thread: leverage moments. The most productive PILOT
negotiations happen when the institution wants something — a zoning variance,
an expansion permit, a city-owned parcel, a tax-exempt bond issuance through
the IDA. In each case, the city holds a card that the institution needs, and
the PILOT is negotiated as part of that transaction. Cities that wait for
institutions to volunteer payments generally get nothing; cities that make
PILOT discussions a standing part of any approval process tend to build up
modest but compounding revenue over time.
Elmira is not New Haven — Arnot Health is not Yale, and the negotiating position
is not equivalent. But the dynamics are similar in kind if not in scale.
The city issues zoning decisions, building permits, and infrastructure connections
that the health system needs to operate and expand. The question is whether
the city chooses to make PILOT discussions part of those conversations.
What It Would Take
The path to a meaningful PILOT program in Elmira runs through negotiation,
not legislation. Here is what each lever looks like in practice.
No state law currently requires PILOTs from non-profit institutions.
Legislation has been introduced in Albany — most notably bills that would require
large non-profits (over $100M in revenue) to make payments to municipalities where
they hold significant property — but none has passed. The state's political economy
on this is difficult: hospital and university lobbies are powerful, and legislators
are reluctant to create a precedent that could threaten the financial stability of
institutions that are often major employers in distressed regions.
The realistic path for Elmira is not waiting for a state mandate. It is building
PILOT language into the city's development approval processes so that any time
Arnot, Elmira College, or LECOM comes to the city for land use approvals, a PILOT
discussion happens as a matter of course.
Practical leverage points
Expansion approvals — hospitals and colleges regularly seek
zoning variances, special use permits, and site plan approvals for new buildings.
Each approval is a negotiating opportunity.
IDA bond issuance — if an institution uses the Chemung County IDA
to issue tax-exempt bonds (which lowers their borrowing cost), the IDA can
require a PILOT agreement as a condition of that subsidy.
City-owned land transfers — if the city or county sells or
transfers property to an exempt institution, PILOT language can be built
into the deed or transfer agreement.
Public pressure and community benefit accountability —
publishing the theoretical tax liability and community benefit reports
side-by-side creates public context for what the institution is receiving
versus what it is contributing.
Franchise and service agreements — utilities, parking,
shared infrastructure, and emergency services all represent costs the city
bears partly on behalf of exempt institutions. A formal service agreement
can include cost-sharing that functions like a PILOT without triggering
the legal sensitivities of calling it a tax.
The Arnot expansion opportunity
Arnot Health has been investing in facility upgrades and service expansion across
its campuses. Any significant capital project requiring city approvals is an
opportunity to open a PILOT conversation. The city's position is not adversarial —
the health system is a major employer and economic anchor — but the conversation
needs to happen explicitly, and the city needs to be prepared with specific numbers
and a reasonable ask.
A reasonable opening position might be: a 10-year PILOT at 20% of theoretical city
tax liability (~$201K/year), indexed to assessed value, with a review clause at year 5.
This is a modest ask relative to Arnot's revenue base and a concrete signal that
the city takes the issue seriously. The alternative — continued rate increases on
taxable property while exempt institutions grow — is a choice with visible consequences
on the city's tax rolls.