New Haven and Hamden are teaming up with Branford and Guilford — or at least their chief elected officials are — on a cause that used to pit cities against suburbs.
The cause: seeking a change in the way the state reimburses cities and towns for lost revenue on tax-exempt property.
Twenty-eight mayors and first selectpeople — including of New Haven, Hamden, Branford, and Guilford —have signed onto a letter urging Gov. Ned Lamont to submit a bill that New Haven State Sen. Martin Looney plans to reintroduce this legislative session. The bill would create a three-tier system for reimbursements under the Payment in Lieu of Taxes (PILOT) program.
Click here for a recent interview in which Looney discussed the details of the bill and the strategy behind it. He seeks to build the constituency of cities and towns looking for change in PILOT.
Mayors of bigger cities like New Haven — which loses more than half its potential tax revenue to state-mandated exemptions on nonprofit-owned property — have clamored for greater PILOT reimbursement. New Haven, for instance, receives less than 30 percent of the lost revenue back.
But suburbs dominate the legislature, so the bigger cities don’t have enough support to pass PILOT changes. Looney’s bill would give more communities a stake in passing changes, as evidenced by the 28 signatories to the letter to Lamont.
The text of the letter follows:
Dear Governor Lamont,
As you continue to guide our state through the COVID-19 pandemic your budget proposal for the next biennium will be an essential part of the economic recovery of our state and the well- being of our residents. There is an opportunity to provide desperately needed funding to municipalities, support small businesses, prevent an increased property tax burden on our most vulnerable residents, and secure future tax revenue for the state.
We write as municipal leaders in strong support of Senator Martin Looney’s proposed legislation to fund the state’s Payment in Lieu of Taxes (PILOT) program and implement a need-based tiered system for the program. This bipartisan group represents towns and cities of all sizes and makeups, reflecting the wide-reaching importance of this bill. This legislation recognizes both the state’s fiscal challenges and municipalities’ urgent need for relief. As it stands, towns and cities with large swaths of non-taxable property are being devastated by the pandemic. Additional state aid is vital — it is the only avenue through which these towns and cities can avoid raising property taxes. This route must be avoided at all costs.
In the last fiscal year, PILOT reimbursements for non-taxable property were below 30% of their statutory amount for colleges, hospitals, and state-owned property. We understand that the state is not able to fully fund the PILOT program this fiscal year due to its own budgetary constraints and the impact of the COVID-19 pandemic. A tiered PILOT program, in which municipalities without the ability to generate sufficient property tax revenue from their grand list receive a greater allocation of their statutory reimbursement until the program is fully funded, presents a real solution for the next fiscal year. Organizing funding into tiers recognizes struggling municipalities’ urgent needs without sidelining other PILOT recipients and ensures that additional dollars in the fund go where they’re needed most. Ultimately, the state must ensure full funding to the program in the future.
This legislation is vital to the state’s well-being and financial recovery from the COVID-19 pandemic. Economic activity in municipalities that would directly benefit from this funding generated over one billion dollars in state sales tax revenue in FY19. Now, the pandemic has forced hundreds of storefronts across our state to shutter and significantly impacted surviving business owners. By including these dollars in your proposed budget, you will prevent a property tax hike and lasting damage to the livelihoods of our small business owners and to the sales tax revenue our state takes in.
Signatories of this letter also include municipalities that would not directly benefit from this proposal in this fiscal year. Nevertheless, we are all in this crisis together. We know that you care deeply about ensuring that our state recovers as quickly as possible from the impacts of the COVID-19 pandemic, without facing a greater tax burden. This measure is essential to doing just that. We urge you to support Senator Looney’s tiered PILOT legislation and include the necessary funding in your FY22 budget proposal.
Respectfully,
Mayor Justin Elicker City of New Haven
Town Manager Kathleen Blonski Town of Farmington
Mayor Luke Bronin City of Hartford
Mayor Shari Cantor Town of West Hartford
Mayor Elinor Carbone City of Torrington
First Selectman James Cosgrove Town of Branford
Mayor Beth DelBuono Town of Newington
Mayor Tom DeVivo Town of Windham
Mayor Ben Florsheim City of Middletown
Mayor Mike Freda Town of North Haven
Mayor Joe Ganim City of Bridgeport
First Selectman Matt Hoey Town of Guilford
Mayor Laura Hoydick Town of Stratford
Town Manager Sean Kimball Town of Cheshire
First Selectman C.G. Knorr, Jr Town of Somers
Mayor Marcia Leclerc Town of East Hartford
Mayor Curt Leng Town of Hamden
Mayor Ron McDaniel, Jr. Town of Montville
Mayor Toni Moran Town of Mansfield
First Selectman Mark Nickerson Town of East Lyme
Mayor Peter Nystrom Town of Norwich
Mayor Neil O’Leary City of Waterbury
Mayor Michael Passero City of New London
Mayor Harry Rilling City of Norwalk
Mayor Nancy Rossi City of West Haven
First Selectman Jayme Stevenson Town of Darien
Mayor Erin Stewart City of New Britain
Awesome that cities and towns are teaming up together to ask the State to address inequities in tax exempt properties, PILOT reimbursement, and the high mill rates in tax income poorer towns and cities. If the State can restructure PILOT and the tax collection and funding structure to make it a more equitable and equal system, our State benefits as a result, where wealthier communities use the non-profits organization services and government services buildings that the cities and large towns host for the good of everyone in the state.