New Haveners will have an opportunity Tuesday to weigh in on whether or not the state should send more money to poor cities that can’t collect property taxes on land owned by tax-exempt hospitals and colleges.
On Tuesday at 11 a.m., the state legislature’s Joint Committee on Finance, Revenue and Bonding will host a live-streamed public hearing on Senate Bill No. 873: An Act Mitigating Adverse Tax Consequences Resulting From Employees Working Remotely During Covid-19, And Concerning The Removal Of Liens On The Property Of Public Assistance Beneficiaries And A Three-Tiered Grants in Lieu Of Taxes Program.
At the core of that proposed bill is one of the policy initiatives that New Haven State Sen. and President Pro Tem Martin Looney has identified as one of his top priorities this general session.
That is, to restructure the system by which municipalities with lots of college- and hospital-owned lands off the tax rolls (like New Haven) are reimbursed by the state, so that poorer communities (like New Haven) aren’t left holding the bag on properties they legally can’t tax. The current system is called Payment in Lieu of Taxes, better known as PILOT.
Looney’s office estimates that the bill, if passed, would see New Haven’s annual PILOT for both college- and hospital-owned land and for state-owned land increase from $41,691,636 to $91,291,654, a jump of more than $49 million a year. (Click here for estimates of how the bill would change PILOTs received by every town and city in the state.)
Here’s how that would work.
The proposed bill would create three new tiers based on the relative per capita property value of each town or city in the state. The first tier would be for municipalities with an equalized net grand list per capita of less than $100,000, the second for municipalities with an equalized net grand list per capita between $100,000 and $200,000, and the third for municipalities with an equalized net grand list per capita of greater than $200,000.
Tier one municipalities (that is, the poorest municipalities in the state) would receive a grant worth 50 percent of the current state-provided reimbursement grant.
That grant is currently calculated to be as high as 77 percent of total property taxes that would otherwise be owed on college- and hospital-owned property. Since PILOT is never fully funded, cities and towns across the state actually get much less than that — often less than 30 percent — reimbursed from the state each year. This bill would bump that guaranteed reimbursement amount up to 38.5 percent (or half of 77 percent) for poorer cities like New Haven.
Tier two municipalities would get a 40 percent reimbursement on the current rate (or 30.8 percent of all lost college- and hospital-related property taxes), and tier three municipalities would get a 30 percent reimbursement on the current rate (or 23.1 percent of all lost college- and hospital-related property taxes.)
The proposed PILOT restructuring will be heard Tuesday as Mayor Justin Elicker — who has signed on to a petition with two dozen fellow mayors and first select-people in support —has said that New Haven is staring down a projected $66 million budget deficit next fiscal year.
Click here for an interview with Looney about the proposed bill.
Elicker, meanwhile, has sent out mass emails and created a Facebook event to encourage New Haveners to testify at Tuesday’s hearing.
Click here to register to testify on Tuesday.