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April 10, 2008

Mayors appeal for property tax relief through PILOT payments
By: Mary E. O’Leary
Reprinted from The New Haven Register

HARTFORD — As home foreclosures climb and city budgets bleed red ink, a core group of city mayors returned to the Capitol Wednesday to reiterate the need for state help toward property tax relief.

Four of the cities where tax-exempt properties approach 50 percent of their grand lists asked that the legislature fully fund the state payment in lieu of taxes law.

State Rep. Cameron Staples, D-New Haven, and state Sen. Eileen Daily, D-Westbrook, co-chairmen of the Finance, Revenue and Bonding Committee, last week came up with the $60 million needed to cover the cost with a new sales tax on businesses whose primary focus is deliveries, such as UPS.

But House Speaker James Amann, D-Milford, is not comfortable with any new taxes and opposes the item, although Wednesday he said he is waiting for Staples to make his pitch on it to the Democratic caucus.

"At the end of the day, someone's taxes are going to go up. ... It's whether we are going to put it on the backs of these working families who are the most fragile ones in our economy right now and where the greatest risk exists," said New Haven Mayor John DeStefano Jr. of the burden on his city's residents.

DeStefano described the property tax as the most burdensome of all the taxes — bills that are due regardless of one's income and that are tied to the increasingly shaky real estate market. Couple this with an 80 percent increase in foreclosures in New Haven over the last year, and he said the outlook is not good.

"There is a huge risk pool here in all of these communities," DeStefano said. "We are not going to accomplish broad property tax reform, but we have to put a stop sign up on these tax shifts."

William Finch, who was a state senator from Bridgeport before being elected mayor last year, said the kind of decisions he has to make now are a lot tougher.

"When I was a senator ... I never took away children's health care and libraries, but that's what I have to do now and that's because I don't have the help of the state that I need," Finch said of the potential 110 positions he may have to cut, while also raising taxes.

"All we are asking the state to do is look at the (tax exempt properties) in our towns and just pay the fraction that they obligated themselves to do when they wrote these laws," Finch said of PILOT.

The PILOT law requires the state to reimburse municipalities 77 percent of the assessed value of exempted hospital and college properties and 45 percent of the value of state properties. The current reimbursement is 59 percent and 39 percent, respectively.

The gap means there is a $9.5 million hole in New Haven's proposed budget for next year.

Stamford Mayor Dannel Malloy could not attend, but Hartford Mayor Eddie Perez and New London Mayor Kevin Cavanagh joined the group.

James Finley, executive director of the Connecticut Conference of Municipalities, said the new revenue estimate from abandoned state property is $90 million, up from $40 million, and he suggested this unexpected $50 million could go toward covering PILOT.

"I think it comes down to the political will of the legislative leadership," Finley said. "If they don't fully fund PILOT, they are passing a tax increase at the local level to the people who can least afford it."

Amann put the needs of the cities in the same boat as other pressures on the state, while the key will be revenue numbers expected next week.

"Those are the things we have to consider before we make any commitments to anybody. The best thing we can do for the state of Connecticut is not raise any taxes and have a balanced budget," said Amann, who is considering running for governor.



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