nothin New PILOT Flies; Will It Be Funded? | New Haven Independent

New PILOT Flies; Will It Be Funded?

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New Haven State Sen. Looney at Tuesday’s virtual presser.

Now that the state legislature has overhauled how Connecticut distributes aid to municipalities that are home to tax-exempt colleges and hospitals, will that same body fully fund the new need-based formula to the tune of $137 million each year?

At stake is a roughly $50 million annual boost to New Haven’s teetering city budget.

New Haven State Sen. and President Pro Tem Martin Looney said Tuesday that he’s optimistic that the Connecticut General Assembly will indeed put its money where its mouth is to back up a newly approved three-tiered structure for the state’s Payment in Lieu of Taxes (PILOT) program.

Those are the annual grants by which the state reimburses towns and cities for land owned by largely tax-exempt colleges and hospitals, as well as for land owned by the state government itself.

While state law calls for the state to reimburse municipalities for 77 percent of revenue lost to tax-exempt colleges and hospitals, actual state aid in recent years has fallen to closer to 25 percent.

Looney joined Mayor Justin Elicker, New Haven State Rep. Roland Lemar, and a half dozen suburban mayors and first selectmen during a Tuesday virtual press conference to celebrate Monday’s passage in the State Senate of House Bill 6516: An Act Mitigating Adverse Tax Consequences Resulting From Employees Working Remotely During Covid-19, And Concerning The Removal Of Liens On Th Property Of Public Assistance Beneficiaries And A Three-Tiered Grants In Lieu Of Taxes Program.

The 28 to 7 vote follows the State House’s 125 to 24 approval last week.

It also comes several weeks after 20 New Haveners testified before the state legislature, urging the lawmakers to better fund a cash-strapped city where roughly 60 percent of property value is tax-exempt.

What we did yesterday in the Senate was recognize for the first time need as an element of the PILOT formula,” Looney said. Municipalities as disparate as Greenwich and New Haven will no longer be funded at the same PILOT percentages. Poorer cities will get increased funds, while wealthier suburbs will not lose the state aid they already receive.

More towns will benefit from this by structuring this based upon need, by net grand list per capita,” he said. Part of the problem previously was that PILOT was of great importance to a relatively small number of communities. Now the benefits and the interests will be spread more broadly.”

The bill now advances to Gov. Ned Lamont’s desk to be signed into law.

Following up on one of the State Senate leader’s top priorities for the current legislative session, the newly approved bill would create three new tiers for PILOT aid 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 and for municipalities with Alliance school districts, 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. (Click here and here for previous articles on how the new formula would be calculated.)

Looney said that fully funding this new three-tiered system would cost the state roughly $137 million more each year.

Our budget process goes on from here,” he said, and the precise allocation for funds remains yet to be certain.” He said he’s confident that the state legislature will back up this new law with adequate funding because of an increasing statewide recognition that cities like New Haven have disproportionately suffered due to the historic underfunding of New Haven. And because of a simultaneous recognition that the fiscal welfare of the state is intimately connected to the fiscal welfare of cities and the jobs, healthcare, and cultural amenities they provide.

In projections released several weeks ago, Looney’s office estimated that New Haven would get roughly $49 million more each year in state PILOT aid if the three-tiered proposal passed. Elicker (pictured) cited that number in his own testimony before the state legislature in mid-February.

Neither Looney nor Elicker used that $49 million number during Tuesday’s presser.

The mayor was asked about how much the city might receive thanks to this new PILOT system, and how this law will affect the two budget alternatives that he proposed on Monday.

I can say that yesterday’s vote coupled with the vote by the House last week significantly increases the likelihood that we’ll be able to pass a Forward Together’ budget, or something close to it,” Elicker responded.

He was referring to the version of his proposed budget with no new local tax increases. It is contingent upon $53 million more in aid from the state and Yale University.

As for whether or not the state legislature will fund the new PILOT system at its full $137 million pricetag, he said, I am the first to admit that the state legislative process is an enigma to me. I never quite know what is going to happen” when legislators actually vote on how much money to appropriate. We need to make sure that we push to ensure that the funding is in place.”

Suburban elected officials also attended Tuesday’s presser. They included West Haven Mayor Nancy Rossi, Hamden Mayor Curt Leng, North Haven First Selectman Michael Freda, Guilford First Selectman Matthew Hoey, and Torrington Mayor Elinor Carbone.

While Guilford does not stand to see any increased financial aid due to this new PILOT structure, Hoey said, he nevertheless supports it because we understand that regionally, we are all in this together. And that what is good for many of our cities and towns is good for us all.”

If urban centers like New Haven, which provide vital services” around health, education, and jobs, do not have adequate resources to run their local governments, he said, then the region and state as a whole will suffer.

Looney said that a total of 42 municipalities across the state will fall into Tier One of this new PILOT structure; 91 would fall into Tier Two; and 35 would fall into Tier Three.

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