The 2014 legislative session concluded Wednesday night in Hartford without reform to Connecticut’s Payment in Lieu of Taxes (PILOT) program, which reimburses towns and cities for nontaxable property.

The state Senate failed to vote on a bill sponsored by House Speaker Brendan Sharkey that would have forced nonprofit colleges and universities to pay property taxes for residential buildings. That bill was a scaled-down version of an initial proposal to entirely eliminate the state’s tax exemption for nonprofits. Even under that sweeping change, Yale University — the largest nonprofit in New Haven — would likely have been unaffected, as its exemption is written into the Connecticut Constitution.

The General Assembly also did not move on a measure sponsored by Senate Majority Leader Martin Looney, who represents half of New Haven, to provide proportionally greater reimbursements to municipalities with a larger share of tax-exempt property.

Looney said his bill died because of the projected fiscal impact, which his colleagues were unwilling to stomach during an even-year session, designed for more minor modifications to the ongoing biennial budget. As for Sharkey’s legislation, there was a “great deal of resistance” to imposing taxes on nonprofits already facing financial pressure, Looney said.

Still, Looney said he was cheered by the additional money secured for PILOT — an additional $10 million in statewide reimbursements for colleges and hospitals and an additional $10 million for state property reimbursements. Those funds are to be allotted among the 169 municipalities in the state.
He added that broader reforms to the state’s tax structure are possible. A “task force on property taxes” will report back to the General Assembly in January on income taxes and the way PILOT is funded and distributed, which are among the areas that Looney said could see reform.

Mike Stratton, a New Haven alder and outspoken advocate for PILOT reform, said he was disappointed state legislators were unable or unwilling to make more substantive changes. He said the legislature has replaced statutory PILOT funding with a “slush fund” that allows the state to selectively pay for individual projects. Full funding would mean roughly $105.3 million for New Haven; the city currently gets about half of that.

“They bargain away our rights for their political power,” Stratton said of New Haven’s state delegation.
But Looney said the overall session was highly productive, citing progress on a public pension plan as an example.

Connecticut Gov. Dannel Malloy praised the legislative session on Thursday morning, singling out 12 areas of priority for his administration that received legislative attention. Among the measures that passed with his backing was a $10.10 minimum wage beginning in 2017.