Source: Kenneth R. Gosselin, Hartford Courant
HARTFORD — The city of Hartford’s push to pay for municipal services and its schools and, at the same time, whittle away at a tax rate that is the highest in the state comes up against a sobering reality: 1,500 properties that don’t have to pay real estate taxes.
A 2021 statewide report from the state Office of Policy and Management showed that if taxed, Hartford’s tax-exempt property would account for 51% of the city’s grand list in 2019 bested only by New Haven, with 56% and Mansfield, at 58%. According to the report, most towns and cities in Connecticut were 30% or less, with the statewide average coming in at 14.2%.
A review by The Courant of real estate tax data provided by the city as of Oct. 1 showed that tax-exempt real estate would have generated $370.3 million in property taxes for the city, ranging from state-owned buildings and private colleges to hospitals and historical sites. The Courant’s review focused on real estate and does not include business equipment, other personal property and eligible motor vehicles.
“For a city like Hartford, it’s all the more exacerbated by the fact that the city’s tax base is limited to begin with,” said Matt Hart, executive director the Capital Region Council of Governments and former town manager of West Hartford. “It’s a small geographic area, and Hartford’s grand list is roughly half the size of West Hartford’s, but the population is twice as large as West Hartford’s.”
“So, that serves to show the challenge the city is facing,” Hart said.
The exempted properties bring many other benefits to the city: culture and arts that attract visitors; colleges and universities that introduce students — and potential future workers — to the city; and centers of medical care that are using cutting-edge technology.
In a state where towns and cities depend heavily on property taxes to pay for municipal services and schools, the loss of tax revenue still remains a critical issue for Hartford.
“One of the challenges for Hartford is that we are a geographically small city with very few undeveloped parcels of land that aren’t brownfields,” Hartford Mayor Luke Bronin said. “That means the opportunities for growth are limited by our size.”
Hartford encompasses about 18 square miles.
“If you take a geographically small city and then, take half of the property off the tax rolls, it leaves a much smaller taxable base,” Bronin said.
The state does reimburse Hartford — as it does other cities and towns — a portion of the lost tax revenue for state-owned buildings, private colleges and schools and hospitals, through an annual “payment in lieu of taxes,” known by its acronym “PILOT.”
According to the city’s tax data, the largest block of tax-exempt property is owned by the city. But state-owned property — as Hartford is Connecticut’s capital city — comes in a clear second.
The PILOT program has existed for decades. Traditionally, state law called for a 45% reimbursement of property taxes for state-owned buildings and 77% for private colleges and schools. But the actual funding also was subject to the financial ups and downs of the state budget.
According to the Connecticut Conference of Municipalities, PILOT reimbursements were actually 14% for state properties in 2021, and 22% for private schools and hospitals.
“They have been nowhere close to where they should be,” George Rafael, director of CCM’s Municipal Resource and Service Center, said. “They made some changes last year that boosted some of the reimbursements but not to the level required by statute.”
State lawmakers approved changes that include creating a three-tiered system that now provides for a new PILOT reimbursement for the poorest cities, which includes Hartford. The program now provides Hartford and other “tier-one” cities 50% of what would have been due under a combination of the existing percentage reimbursements for state-owned buildings and private schools and hospitals.
Under the change, Hartford saw its PILOT payment rise to $52 million in fiscal year 2022, up from $32 million, the previous year, according to CCM.
Bronin said the change certainly has helped, but with a far lower reimbursement for state-owned real estate, the city is still behind.
“Hartford is home to such a large concentration of state buildings that the less favorable funding formula makes a big difference,” Bronin said.
Here is a look at a dozen categories of tax-exempt real estate in Hartford:
1. City of Hartford
No. of properties: 498
Annual exempted taxes: $100.5 million
The details: These properties include City Hall, schools and fire stations. But the properties also encompass parking lots, parcels slated for redevelopment and properties taken by the city in foreclosures.
2. State of Connecticut
No. of properties: 178
Annual exempted taxes: $85.8 million
The details: There is a heavy concentration of state-owned buildings in Hartford because the city is the state capital. The Capitol building is immediately recognizable, but there are dozens of other properties such state office buildings, the University of Connecticut’s downtown campus, the Hartford Correctional Center and Hartford-Brainard Airport.
3. General hospitals & other health care
No. of properties: 64
Annual exempted taxes: $76.9 million
The details: Hartford’s hospitals — including Hartford Hospital, St. Francis Hospital and Medical Center and Connecticut Children’s Medical Center — maintain sprawling main campuses in the city.
4. Private schools & colleges
No. of properties: 73
Annual exempted taxes: $34.6 million
The details: These institutions include Trinity College, University of Hartford, Rensselaer and the Hartford International University for Religion and Peace, the former Hartford Seminary.
5. ‘Special Acts’
No. of properties: 24
Annual exempted taxes: $19 million
The details: The “Special Acts” category of tax-exempt property covers quasi-public agencies and other similar authorities such as the Materials Innovation and Recycling Authority and the Metropolitan District Commission.
5. Churches, other religious buildings
No. of properties: 253
Annual taxes: $17.7 million
The details: Dozens of houses of worship are found throughout the city, from the massive Cathedral of St. Joseph on Farmington Avenue to modest storefront churches. This category includes religious schools, convents and parsonages.
6. Charitable organizations
No. of properties: 176
Annual exempted taxes: $14 million
The details: Myriad organizations are identified as charitable, including both the YMCA and the YWCA as well as the South Park Inn shelter, The Salvation Army and the Boys and Girls Club of Hartford.
7. Federal government buildings
No. of properties: 6
Annual exempted taxes: $5.9 million
The details: The U.S. government also does not pay property taxes on buildings such as the Abraham A. Ribicoff Federal Building and Courthouse in downtown Hartford.
8. Housing Authority, city of Hartford
No. of properties: 135
Annual exempted taxes: $4.6 million
The details: The city’s housing authority oversees hundreds of housing units located throughout the city.
9. Educational buildings
No. of properties: 9
Annual exempted taxes: $3.7 million
The details: The tax-exempt “educational” designation includes the Connecticut Science Center, the Hispanic Health Center, the Capitol Region Education Council and the Watkinson School.
10. ‘Literary’ buildings
No. of properties: 7
Annual taxes: $3.4 million
The details: The Wadsworth Atheneum, TheaterWorks and the Bushnell Center for the Performing Arts are among the properties designated as “literary.”
11. Historical buildings
No. of properties: 10
Annual taxes: $1.2 million
The details: One of Hartford’s most popular attractions, the Mark Twain House, is tax-exempt under historical buildings as is the Charter Oak Temple, the first synagogue built in Connecticut and now a cultural center and the Amos Bull House on South Prospect Street.
No. of properties: 47
Annual taxes: $830,202
The details: Cedar Hill Cemetery on Fairfield Avenue is the final resting place of actor Katharine Hepburn, industrialists Samuel and Elizabeth Colt and poet and businessman Wallace Stevens.
Click to see the list of Hartford tax exempt sites.