Paul Bass Photo
2015 rally challenges how Yale spends endowment returns.
Mark Greenberg has an idea for how to pump more tax money into cities while spending less, not more, state money: Tax big universities and hospitals.
Like, for instance, Yale and Yale-New Haven Hospital.
Greenberg suggested lifting state property tax exemptions for those institutions during an interview about his current candidacy for the Republican nomination for state comptroller.
“The fact that Yale University should be paying nothing in real estate taxes is absurd,” Greenberg said during an interview on WNHH FM’s “Dateline New Haven” program.
Greenberg, who is 64 and lives in Litchfield, has run for Congress three times in the Fifth U.S. Congressional District. This year he’s facing Kurt Miller, Seymour’s first selectman, for the Republican nod to challenge incumbent Democratic Comptroller Kevin Lembo in November.
Miller won the endorsement of the state party at its recent convention. Greenberg obtained enough delegate support to qualify for an Aug. 14 primary; he has since announced (click here to read the release) that he is indeed pursuing that primary.
The comptroller, as Greenberg put it, serves as state government’s “chief financial officer.” Besides signing government workers’ checks, he or she issues quarterly budget forecasts and sits on the State Bond Commission. Greenberg said he wants to use his experience as owner of a successful real estate business to help steer the state government toward fiscal discipline.
“I’m very well off. I have a great family. Five kids. The greatest wife in the world. I don’t need the gig. I feel like I want to give back to the state. And this state is falling apart right now,” he said.
“I remember when the state was absolutely the greatest, not only in the Northeast, but in the country! Before the income tax and before [former Gov.] Lowell Weicker, this was where everybody came. Wealthy individuals in Greenwich and Stamford. They brought their business and their hedge funds. Came to Fairfield and Greenwich …”
His stand on tax exemptions for large nonprofits, and the state’s Payments in Lieu of Taxes (PILOT) program to reimburse cities for lost revenue, doesn’t fit neatly into party or ideological categories. That’s because the issue itself doesn’t, either. A Republican U.S. senator (from Iowa) has led the charge to reexamine how big tax-exempt universities spend their endowments, joined by progressive union activists (in New Haven). A Democratic governor (in Connecticut) in 2017 advocated taxing real estate owned by big hospitals. In 2016, New Haven politicians pushed an unsuccessful state bill to remove some of Yale’s tax exemptions. Democratic and Republican legislators alike have defended nonprofits’ tax-exempt status. Meanwhile, the institutions argue that they already pay a lot of money in taxes, have tax exemptions enshrined in law, and in the case of the hospitals provide services for the poor at great loss.
Following is an excerpt from the discussion about that subject with Greenberg on WNHH’s “Dateline” program (recorded before the state convention).
Cities & PILOT
Paul Bass Photo
Mark Greenberg at WNHH FM.
Greenberg: Ridiculous: 60 percent of Hartford’s off the rolls. Fifty percent of Waterbury’s off the rolls.
WNHH: Fifty-four percent of New Haven …
Fifty-four percent. This has to be corrected. Cities have to be made more vital if we’re going to solve our problem.
How would you correct it?
You know something? The assessors could correct it to some extent. Because 501(c)3s have to prove that they’re using their real estate for the purpose of their mission. The assessors do not press the 501(c)3s.
The opposite view is you collude with them to bump up how much their properties are worth so we get greater reimbursements under PILOT.
PILOT reimbursements are nothing and small and finite.
OK. It’s a bad subject! The fact that Yale University should be paying nothing in real estate taxes is absurd.
Charles Grassley, the Republican U.S senator, agrees with you about [examining] higher ed tax exemptions. So would you be for taxing Yale?
Yeah. Sure. Why not? Based on means. Based on capability of paying. They have a billion dollars in the bank!
In New Haven, so much of our 54 percent of tax-exempt property [is owned by] two entities: Yale University and Yale-New Haven Hospital. So we’re not going to get so much more if we scour every last church to see if they’re really tax exempt.
So would you deal with it, rather than increasing state [PILOT] payments to the city, by putting not-for-profits on the tax rolls?
Absolutely. Based upon need, and based upon if they’re using their property for the right purposes.
I’ll give you an example. Every four years the Simon Foundation, my animal-rescue foundation, gets a quadrennial quesitonnaire that goes into [how] I’m using my facility, which saves dogs and cats in Bloomfield. What are we using it for? If I’m not using the whole facility for my mission, then I’m obligated to pay a portion of that assessed value in taxes.
Well in my case I use my full facility for the mission.… The point is, the assessors need to look into the 501(c)3 properties are being used for.
I think I’m hearing you say that if you’re a wealthy institution of higher education — for instance if your endowment is above $20 billion — you can pay taxes on your property to the city.
I think so. Absolutely.
What about hospitals?
We have to look at the means very carefully.
What about big hospitals?
Big hospitals?
Yale-New Haven Hospital?
Sure. Why not? Let’s look at it.
They say that’s going to make it harder for them to deliver care to the poor because they’re already taking a haircut on Medicaid.
Of course they’re saying that, because they don’t want to pay taxes. Every situation’s different. By the way, there’s a tremendous consolidation in hospitals. The point is that hospitals are actually becoming stronger as they’re going through this consolidation and as they’re understanding Obamacare a little better. Insurers are becoming stronger, too, like Aetna.
The bottom line is I want to look at their profitability, I want to look at what portion of their real estate they’re using for their actual mission, which is taking care of people, as opposed to just housing members of their board or things like that.
You’re talking about two issues here: You’re talking about whether they have expenses they’re calling not-for-profit that aren’t.
I want to nail you down on this. I think you’re also saying that the legitimate education mission of higher education that big universities have should still not exempt them from paying local property taxes. And you’re saying that about hospitals too. In addition to the issues you brought up, like small stuff, like the house the executive might have, you’re also saying the social mission should not be exempting them any more from property taxes …
We have to look at means as well.
Right. But Yale-New Haven and Hartford Hospital: Should they be paying taxes?
Sure.
Not “look at it.” Should we do it?
Yeah. Let’s do it. Let’s do it.
So you’re saying [Connecticut] would no longer have to make these payments in lieu of taxes, which would help the state budget; and cities that have been screwed out of not being able to tax their property will then be able to …
Let me give you a perfect example. We talk about ECS [Educational Cost Sharing]. We talk about redistribution of wealth from stronger towns to the cities. The City of Hartford has thousands, millions of dollars of assessments sitting with the state of Connecticut, that the state is paying no taxes on! Why doesn’t the state pay its share of taxes to the city of Hartford? Which will then reduce a payment that it ultimately it has to pay?
You’re talking about the second group of Payment In Lieu Of Taxes-covered properties. First you had the not-for-profits. Then you have state-owned property. Do you think the state should pay taxes to cities on state-own property?
Yes.
Why?
Why not? Ultimately it’s coming from somewhere.
We’d love you in New Haven for that, because now you’re solved our [revenue] problem. But now you’ve made that [state government] budget problem you’ve identified worse, Mark Greenberg. Because now the state, which already can’t pay its bills, would have to pay for all this office space.
Well, it’s taking out of one hand, putting it into the other, actually.
I see your point on PILOT [for big hospitals and universities]. In that case, you’re not costing the state more. You’re shifting the cost to hospitals and universities — which, by the way, [Gov.] Dannel Malloy did try to get the hospitals to pay more taxes. And both parties stopped him.
Inherent to what I’m saying is this taxation system we have doesn’t work. Hasn’t worked for a number of years. So we have to come up with something different. We have to come up with something out of the box. Where we don’t produce these deficits year after year after year. Thinking the old way is not going to work. We have to look at the whole methodology.
Click on or download the above audio file or the Facebook Live video below for the full interview with Mark Greenberg on WNHH FM’s “Dateline New Haven.”
Sounds good to me, tax Yale.
The hospital is a tax exempt monopoly at this point and the school builds apartments-not dorms, to house students also tax exempt. Not right.