Facing a $56.2 million budget deficit in the coming fiscal year, Hartford city officials are considering a payment-in-lieu-of-taxes (PILOT) program to help generate revenue from tax-exempt organizations, the Hartford Business Journal reports.
Although a proposal has yet to be presented to the city council, David Panagore, the city's chief operating officer, told the Business Journal that any such proposal is likely to target larger nonprofits with a significant amount of property. According to Panagore, the city plans to sit down with those organizations in the near future to come up with a payment agreement that is fair.
The city's budget shortfall is driven in part by a recent property revaluation, which lowered the value of many commercial properties. The city also eliminated a surcharge on commercial real estate. More than half the property in Hartford is owned by educational, nonprofit, religious, or governmental groups, and the city estimates the combined value of those properties at approximately $3.6 billion.
The largest nonprofits in Hartford — and the most likely targets of a PILOT program — are hospitals and colleges. They include Hartford Hospital, St. Francis Hospital and Medical Center, and Trinity College. However, each of those institutions employs thousands of people and has a positive economic impact on the Greater Hartford region. PILOT programs in New Haven, Boston, and Springfield, Massachusetts, have generated mixed results.
"You can't just pick up the phone and launch something like this," Panagore said. "There must be a lot of public discussion."