Sharkey, Looney Agree On PILOT Fix

The leaders of the Connecticut General Assembly’s two chambers have united on how best to pursue a proposal to send more state money back to communities like New Haven and Hamden for their tax-exempt properties.

The two leaders — incoming State Senate President Martin Looney of New Haven and House Speaker Brendan Sharkey — confirmed their agreement on Friday.

Looney and Sharkey, both Democrats, last session floated two separate proposals to reach the same end: boosting the state reimbursements sent to communities burdened by lots of tax-exempt properties under the Payments in Lieu of Taxes (PILOT) law.

The PILOT law authorizes the legislature to send 77 percent of lost revenue back to cities and towns. In practice, it has been sending back only 33 percent of the money lost on hospitals and colleges, 22 percent lost on state-owned property. That’s one reason New Haven struggles each year to avoid tax increases without also slashing public services.

Last year Looney proposed a fix: Set up new tiers for PILOT reimbursement. Cities like New Haven that have the highest amount of tax-exempt property would be guaranteed at least 50 percent reimbursement. The bill would set three tiers, based on how much property in a community is tax-exempt.

Sharkey proposed a different plan: Enable cities to start collecting taxes from large not-for-profits like hospitals. Hospitals could then seek reimbursement from the state.

Neither bill passed.

Both proposals are tough sells in a suburban-dominated legislature. However in recent years more inner-ring suburbs (like Hamden and West Haven) have seen more of their tax rolls go to tax-exempt entities, and have expressed interest in PILOT reform.

Looney said in an interview Friday that he and Sharkey have come to an agreement to press for passage this session of his three-tier bill.

Sharkey’s spokesman, Larry Perosino, confirmed the agreement. He said Sharkey will also pursue a separate bill to enable towns to keep properties newly purchased by tax-exempt entities like hospitals on local tax rolls.

In a statement issued through Perosino, Sharkey commented: ​“The critical need for property tax relief is one of the most important issues facing Connecticut’s families, and changes to how PILOT funds are distributed based more on the level of tax exempt property a municipality hosts would be solid progress. I also intend to pursue legislation similar to what passed the House last year, where newly acquired properties by non-profit colleges and hospitals would remain on a town’s tax rolls, so hard working families and local businesses would not have to make up the difference.”