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Cities, Towns Seek State Assistance

By DON STACOM, Courant Staff Writer

April 15, 2008

A lobbying organization for the state's municipalities is asking Gov. M. Jodi Rell to come up with $60 million to help communities that have hospitals, colleges, prisons and other properties that pay no local taxes.

But the same economic downturn squeezing town and city budgets this year is leaving Rell and state lawmakers chilly toward any plan that calls for raising other taxes.

The money would be a much-needed windfall for Hartford, Waterbury, Bridgeport, New Haven and a few mid-size municipalities, all of which are struggling in this year's economic downtown, according to the Connecticut Conference of Municipalities.

"The cities are talking about layoffs this year. Bridgeport is saying it very openly, others are saying it quietly — but they're all talking about it," said James Finley, executive director of the lobbying group.

The proposal also would divide millions among mid-size communities such as Mansfield, Farmington, Cheshire and Windsor Locks, all of which lose millions in potential revenue every year because of tax-exempt state properties.

The General Assembly's finance committee this month endorsed a funding increase for the Payments in Lieu of Taxes (PILOT) program. But that was based on generating about $20 million through a new tax on package deliveries, an idea that Democratic and Republican leaders at the Capitol say is pretty much dead.

"The governor is not in favor of any new or increased taxes at this time. It's especially ill-advised right now given our uncertain economy," said Chris Cooper, a spokesman for Rell. "The idea of imposing a new tax on small and mid-sized business is contrary to what we're trying to do, which is support the drivers of business growth — our smaller companies."

CCM said Rell and lawmakers can bring about the PILOT increase without the delivery tax. New estimates project the state will collect $50 million through its unclaimed property fund; using that money for PILOT would leave the state to come up with just $10 million more out of its $18 billion budget, Finley said.

Municipalities have complained for years that Connecticut doesn't pay nearly enough to offset revenue lost to tax-exempt properties. College and university campuses, for instance, take huge quantities of prime real estate off local tax rolls in New Haven, Hartford, Mansfield and Cheshire.

"For Hartford, PILOT means more police officers, more firefighters, an increase in summer jobs for young people, more programs for seniors, maintaining city services and property tax relief for residential owners and businesses," said Sarah Barr, communications director for Hartford Mayor Eddie Perez.

Finley said the impact on towns with big tracts of tax-exempt land is likely to get worse if lawmakers don't act.

"We're hearing the biggest economic development in the state right now is expansion of colleges," he said.