Farmington officials have said for a few years that they’d like to see the town’s PILOT grants increased. Instead, Gov. Dannel Malloy, in his proposed 2013-2015 budget, eliminated the grant, which stands for Payment in Lieu of Taxes and reimburses the town for state-owned property, which is exempt from local property taxes.
The grant, which covers properties like the UConn Health Center and Tunxis Community College, brought $2,855,163 to Farmington this year.
While Malloy proposes to compensate for the loss with additional money in the town’s Educational Cost Sharing Grant, local officials, while meeting with state legislators recently, said they fear that the PILOT money will be gone permanently while the ECS grant will also disappear.
"We’re pleased that there is no damage this year to the budget but it is very concerning that it looks like they are phasing out the PILOT fund altogether for towns," Town Manager Kathy Eagen said. "For Farmington that is really a significant issue."
It’s a significant issue because of the large and growing percentage of state-owned property in Farmington. The UConn Health Center has expanded and with the state Bioscience Connecticut project, to which Malloy has committed $1 billion to bolster the economy, will continue to grow.
According to the health center’s website, in 2011 the Farmington campus consisted of 37 buildings totaling over 2.1 million square feet, employing 5,000 people and generating $1 billion in gross state product a year.
Farmington officials have been supportive of Malloy’s Bioscience Connecticut initiative and welcomed Jackson Laboratories, a nonprofit that will also sit on the health center’s campus.
But they are concerned about the loss of revenue for the town, especially in light of the increasing services the town will have to provide to the growing campus.
"Seeing what’s going on at the Uconn Health Center, we’re investing over a billion dollars in that facility and UConn just took another property off our rolls," Town Council Chairman Jeff Hogan said to the town’s legislators. "We are going to have more of an obligation to service this new billion dollar investment… and we need that PILOT money for town services regardless of ECS money."
The most recently acquired property, 195 Farmington Ave., is a 44,000-square-foot office building contiguous to the health center’s main campus. The property formerly brought the town $82,407.74 in property taxes, according to Eagen’s report. While the property would qualify for reimbursement at the reduced PILOT rate, Malloy’s plan eliminates the PILOT grant, resulting in a total loss of funds from the property.
To prevent the loss from hitting the upcoming year’s budget, Hogan and Eagen wrote to UConn, asking them to delay their purchase until Feb. 1 – the tax cutoff.
"The Town of Farmington respectfully requests that the University of Connecticut Health Center not acquire 195 Farmington Avenue until after February 1, 2013.
"If the Health Center acquires the property before February 1, 2013 the Town of Farmington will lose the January tax installment of $41,000 which would be a shortfall in our 2012-13 Town Budget," Hogan and Eagen wrote.
The health center did not delay the purchase, closing on the property on Jan. 18 for $5.4 million. However, the health center replied that it would honor the January tax obligation.
State Sen. Beth Bye also told the council that Farmington’s legislators – including herself, Reps. Brian Becker and Mike Demicco and state Sen. Terry Gerratana – had introduced legislation to reclassify UConn Health Center from "state-owned property" to the "colleges and hospitals" designation, which is reimbursed at a higher rate. In addition, this grant was reduced slightly but not eliminated in Malloy’s two-year budget proposal.
"The shift on PILOT is more reason to press harder on that," Bye said. "The shift gives us a better chance to say ‘look, you’re asking a lot of Farmington with UConn and Bioscience… It’s just baffling that it’s not [in college and hospital]."