Funding PILOT reimbursements helps ensure prosperity

January 22, 2019

In his op-ed on the importance of supporting PILOT funding in Connecticut (Why PILOT Doesn’t Fly Right, Dec. 10), Bridgeport Mayor Joe Ganim correctly points out that cities play a vital role in anchoring and supporting neighboring communities, attracting new residents and employers to the region and offering a variety of important services, institutions, vibrant city centers and the arts. Many of these organizations and entities are tax-free, reflecting their overall value to city residents and surrounding towns.

Granting property tax exemptions to qualifying nonprofits, including higher education, has been around longer than the U.S. Constitution. This practice is based on British tax models that recognized the value these entities provide, and their role in enhancing education, health and the general welfare of each state. But this lost revenue leaves gaps in local budgets, and those gaps are causing pains as municipalities struggle with dwindling state resources, decreasing property tax revenues and increased expenses. At the same time, neighboring municipalities utilize and benefit from these not-for-profit organizations. It is an unjust skewing of the burden to municipalities that welcome hospital, colleges and justice facilities.

To its credit, Connecticut is ahead of the national curve when it comes to a valuable policy designed to help compensate municipalities for revenue lost to tax-exempt organizations such as colleges and universities, nonprofit hospitals and cultural organizations. This compensation was supposed to lessen tension between cities and their tax-exempt stakeholders and help them focus, instead, on the many symbiotic educational outreach, recreation, service and arts programs they share with their local communities.