State Senate Majority Leader Martin Looney (D-New Haven) is exploring the feasibility of changing how payments in lieu of taxes (PILOT) for tax exempt properties are proportioned out to cities and towns. PILOT payment is a hot-button issue in New Haven, Looney’s hometown.
Looney is asking the state legislature’s Office of Legislative Research to study how to change PILOT payments. Currently, every city and town gets the same PILOT percentage payment, now about 32 percent of what would be paid if the property had been taxable. Tax exempt properties are largely colleges, universities, hospitals and state-owned property. New Haven has the most such properties in the state.
“Every PILOT should not be at the same level. Cities and towns that have more tax exempt properties should get a high percentage,” Looney said. He says he wants to explore a three-tier system with the top ten cities like New Haven getting the highest PILOT percentage, a second tier those with a bit less affected property a smaller percentage and then every other town an even smaller percentage. Looney adds however, “Every city and town should be held harmless [under his idea] or, not get any less than they do now.
Looney says things are complicated by the fact that much of the aid to municipalities is in the form of education funding that Gov. Dannel Malloy has fought to keep at the highest level possible. Looney has always favored education aid.
State Speaker of the House Brendan Sharkey also has an idea regarding PILOT. He wants to eliminate the tax exempt status of all property in the state meaning entities such as Yale, Yale-New Haven Hospital (in Looney’s city) and Quinnipiac University (in Sharkey’s town of Hamden) would pay property taxes like everyone else. The idea may sound good on the surface but would likely trigger an apoplectic response from the entities affected. In other words, they’d totally freak. “I think changing the percentages [into a three-tiered system] is more realistic,” Looney said.
It’s important to note that Looney is in line to become senate president in the fall. Current Senate President Don Williams is not seeking reelection. That puts Looney in a powerful position.