Lack of State PILOT Monies for Non-Taxable Properties Hurting City
There are 16,874 taxable properties in New Britain. There are also 490 that are non-taxable. While the number may not sound like a lot, much of that exempt property are large State owned properties that includes places like Central Connecticut State University and the Hospital of Central Connecticut.
“Our exempt grand list in relation to our taxable grand list is almost one third ($1 billion) of the City,” said New Britain Assessor Mike Konik. “We have $2.58 billion of taxable properties.”
In fact, New Britain is ranked 5th in cities in the state that with the highest number of non-taxable properties.
In comparison: Bristol in fiscal year 2014 received $521,930 because it does not have as many non-taxable properties. New Britain meanwhile received $2,095,010.
The two City hospitals, schools, parks, churches and other tax-exempt properties comes to 29.77 percent of the tax base or over $1 billion that can not be taxed.
“New Britain is right up there with the Hartford’s and Bridgeport’s and New Haven’s of the world,” said Konik. “When you have as much state properties as we have – state hospitals, schools and churches and variety of other exempt charitable organizations – it is a big chunk. When I look at a map of properties, as the assessor, I see a whole bunch of holes.”
New Britain’s tax rate is 49 mills. Taxed properties pay that rate. The remaining properties are paid for by the state through payment in lieu of taxes (PILOT) grants. But, the amount New Britain gets can vary.
Of those exempt properties, the City receives a PILOT Grant from the state for state properties and hospital properties.
This year New Britain anticipated it would get $6.8 million. It is getting $6.4 million. The difference is then made up by City taxes next year.
According to the law, the state PILOT grant gives towns 45 percent of the amount of taxes on State properties they would normally get. But that payment can be as low as 20 percent if the state does not have the money to pay for up to 45 percent. Based on the adopted amount, the State this year will pay New Britain only 21 percent.
That means New Britain should have received $7.9 million, but instead get $3.7 million.
For hospitals, it is 77 percent of what normal taxes would be on other property. The State paid 28 percent. The City would have received $7.4 million based on the formula at 77 percent, but New Britain got $2.8 million on those properties.
The true tax amount the City would get if those properties were taxable would be over $26 million. It leaves New Britain about $20 million short.
“It is unfortunate that the city is so reliant on state funding. It is even more worrisome that the PILOT program that’s in place to make up the difference of the revenue lost to tax exempt properties is being adhered to only at the bare bones minimum as set by state law,” said Mayor Erin Stewart. “This leaves us without millions and millions of dollars in money that would otherwise lessen the burden for local taxpayers.”
“The majority of (State property) is CCSU, the courthouse, the Department of Public Utility Control on Franklin Square and land from around the highway taking and the Busway,” said Konik. “We won’t be paid for the Busway until next year.”
There are also 99 church properties and more private buildings where churches are located that do not pay proper taxes.
Each year the rates change. This year the new cancer center added more to the state tax property.
“While many of these organizations, like churches and social service agencies play vital roles in our community, the vast number of them pales in comparison to other towns in the state,” added Mayor Stewart.
Starting next year the car taxes will be done similarly as everyone’s car tax will be capped at 32 mills. The State grant program is planned to make up the difference. But it is incomplete and may not pay the entire difference. It will be done on a tier formula.
“One of the things they are looking to do is give more money on the PILOT share to make up for the (car tax) loss,” said Konik. “They are supposed to make up the difference.”
But, some do not believe the Cities will get their fair share.
“Although the state intends to hold cities ‘harmless’ with the implementation of a new motor vehicle tax cap, I remain skeptical about the impact it will have on New Britain due to previous lackluster promises,” said Mayor Stewart.
And if that does happen, that may leave New Britain once again short in funds.