Hamden Mayor Lauren Garrett and Connecticut Lieutenant Governor Susan Bysiewicz led a press conference on Aug. 28 to discuss the $48 million in state funding the New Haven County town is slated to receive in fiscal year 2023-24.
But why does Hamden receive more state funding than over 90% of Connecticut’s 169 municipalities? In the case of one specific grant, it’s because of the relationship between Quinnipiac University’s tax status and the town of Hamden’s property wealth.
The measure of a town’s taxable property per resident — formally, its equalized net grand list per capita — indicates how easily a town can raise revenue from property taxes. An adjusted property wealth formula considers a town’s per capita income in the latter calculation.
Hamden’s income-adjusted property wealth ranks in the bottom 15% among all Connecticut municipalities in fiscal year 2023-24, data from the Department of Education reveal.
And although Quinnipiac’s two 250-acre college campuses in Hamden inhabit roughly 2.4% of the town’s total land, the university’s status as a 501(c)(3) nonprofit organization exempts it from paying town property taxes. Thus, Hamden’s financial woes are only further complicated by the town’s inability to collect property taxes on Quinnipiac’s Mount Carmel and York Hill properties.
For exactly this reason, the state of Connecticut operates a $339 million municipal aid program to reimburse towns for exemption-related lost tax revenues. The state issues these reimbursements — aptly named payment in lieu of taxes grants — to towns with private colleges, as well as those with hospitals or state-owned property.
“Connecticut is actually one of the few states that provides any reimbursement at all to municipalities for the tax-exempt property owned by private colleges and by hospitals,” said Martin Looney, president pro tempore of the Connecticut Senate, at the press conference.
In 2023-24, Hamden received more than $7.6 million in PILOT funding — the ninth-most in the state — for its tax-exempt properties, including Quinnipiac.
“The PILOT funding that we get is pretty significant, and it really does help to reduce the burden on taxpayers,” Garrett said. “It’s not as much as we would get if we got tax revenue directly from the property, but it is still very helpful.”
This funding — which accounts for approximately 2.7% of the town’s revenue — is not only an 11% increase from Hamden’s FY 2022-23 PILOT funding but also a more than $430,000 increase from the allocation initially recommended in Governor Ned Lamont’s biennial budget.
“It’s important that with the improvements that are being made at Quinnipiac, that we go in and make sure that our assessment is appropriate,” Garrett said. “Because that gets sent up to the state and we have the opportunity to further increase our PILOT funding.”
Garrett wrote in an Aug. 2 budget revision order that the town intends to put the majority of the additional funds into the legislative council’s emergency fund account.
Connecticut’s statutory PILOT grant formula technically guarantees a 77% tax reimbursement for private universities and hospitals and a 45% tax reimbursement for most state-owned properties. However, a lack of sufficient government funding for PILOT grants led state legislators in 2021 to restructure the program to prioritize communities with the lowest property wealth.
Now, the state allocates PILOT funding via a three-tiered system to provide the most financial assistance to towns with the most need. As of fiscal year 2023-24, the redesigned program ensures that tier one municipalities — towns and cities with below $100,000 of taxable property per resident — receive at least 53% of the funds owed by the statutory PILOT formula.
Meanwhile, tier three municipalities — the state’s wealthiest communities with more than $300,000 of taxable property per resident — are entitled to only 33% of the statutory funding calculation.
Amid Quinnipiac’s continued growth, Looney said that Hamden’s delegation fought to “ensure that the formula put Hamden in the top tier for reimbursement.”
“Prior to a couple of years ago, all PILOT property was treated the same way,” Looney said. “And what we’ve done is now look at the need of the town, and Hamden and eight of those communities are in the top tier for reimbursement and get a significant increase in PILOT over what the previous formula had done.”
