Budget season has ended, but one city leader says now is the time to revive the age-old idea of taxing Hartford’s nonprofits — including his own employer.
Democratic City Councilman James Sanchez wants state lawmakers to craft a bill that would require private universities, hospitals and other major nonprofit organizations in Hartford to pay property tax on 20 percent of their assessed value, according to a resolution he entered this week.
Sanchez said that he would like to tax approximately 15 organizations, but his proposal cites only three examples — St. Francis Hospital and Medical Center, the Bushnell Performing Arts Center and the Metropolitan District Commission, his employer of nearly 19 years.
Sanchez, the council’s majority leader, started at MDC working with hazardous waste and now does community outreach. He said he referenced the tax-exempt, quasi-public agency because he thinks all major entities in the city should contribute at least some property taxes.
“It’s the right thing to do, and it’s the responsible thing to do,” Sanchez said.
Hartford, like some other capital cities, struggles financially in part because about half of its properties are exempt from paying property taxes. Many of those are state and federal buildings, universities, hospitals and charitable organizations.
This fiscal year, the city collected $284.1 million in general property taxes and received the rest of its $570 million budget from state funds, education cost sharing, as well as some local reimbursements from Trinity College, the Hilton and Marriott hotels and and other entities.
The state paid Hartford a $30.1 million reimbursement for the property taxes it can’t collect from state-owned buildings, private universities and hospitals, about half the $60.8 million payment Connecticut would have made if it used the traditional PILOT statute formula.
Still, Sanchez said he would seek taxes from Trinity College and Hartford HealthCare — the city’s sixth highest tax payer — among other college campuses and hospital properties.
MDC would pay nearly $180,000 under his resolution, which was sent to a council committee.
The Bushnell would pay $238,880 on its nearly 70,000-square-foot theater and a few other properties. Neither nonprofit would comment this week.
Sanchez says he hasn’t calculated how much revenue the change would generate. And while he specifically referenced his own workplace, a hospital and a theater, he said in an interview, “I’m not looking to tax nonprofits who are actually working within our community to improve our community.”
He added, “The people I feel are suffering are the taxpayers and small business owners, and I believe we all need to be responsible.”
In response, St. Francis Hospital and Medical Center said its community benefit ministry delivered more than $171 million in financial assistance and other costs in 2018, as well as health services, education, research and community building activities.
Those activities are consistent with the intent of a PILOT program, said David Bittner, the senior vice president and chief financial officer of Trinity Health of New England.
“We’re proud of the significant ways we contribute to our community and will continue to fulfill our healing mission,” he said.
Nonprofits throughout the state bristled this year at similar measures that would have levied new taxes on charitable organizations, hospitals and private universities. One bill failed and another is pending, but has changed significantly to make it optional rather than required for nonprofits to pay into new community restoration funds.
Organizations like the Hartford Foundation for Public Giving, Hartford HealthCare and the YMCA of Greater Hartford spoke out against the measures in April, testifying before lawmakers that a new tax would diminish their ability to serve the most vulnerable residents, and make it more difficult to court and retain donors.
“Such a tax does not recognize the nonprofit sectors’ importance to local communities,” said Marek Kukulka, CEO of the Archdiocese of Hartford’s Catholic Charities. “This additional cost will put further strain on our already overstretched resources to provide services that prevent costly hospitalizations, stabilize and nurture stronger individuals and families, lower recidivism and help make communities safer.”
Hartford HealthCare said it would owe another $15 million in taxes under the bills, on top of the $182 million it pays in provider taxes to Connecticut and $7 million in municipal property taxes.
The hospital network already provides more than $265 million in annual community benefits, according to the legislative testimony of Kim Harrison, the network’s vice president of government affairs.
The last serious proposal at the city level came from former Mayor Pedro Segarra in 2012, the year after the city’s grand list took a 10 percent hit.
For the first time since 2011, the city’s grand list dropped again this year, by 1.17 percent. The decrease of $4.1 billion to $4.03 billion was largely due to a spike in tax appeals and the conversion of city apartments into condominiums.
The budget is balanced for next year, but by 2024, the city anticipates needing to mitigate about $4 million in anticipated costs that won’t be covered by revenue.
That’s according to plans filed with the Municipal Advisory Review Board, the state oversight panel overseeing Hartford’s five-year recovery plan as the state pays down the city’s debt.
Councilwoman Wildaliz Bermudez, the minority leader with the Working Families Party, said Sanchez’s idea is worth exploring given Hartford’s budget issues, but “there needs to be a more aggressive conversation.”
She noted that Yale University gives New Haven more than $11 million in voluntary payments in lieu of taxes, something Hartford could explore with its college campuses.
“If we’re really serious about it, then what does that mean? What does it look like? What kind of community benefits could we achieve?” Bermudez asked. “It requires a more robust initiative.”
Rebecca Lurye can be reached at rlurye@courant.com.
