Colleges (Private) and General/Free Standing Chronic Disease Hospitals - Payment in Lieu of Taxes (C & H PILOT) Program Description

This program provides a payment in lieu of local property taxes (PILOT) to municipalities for private colleges, general hospitals, and free standing chronic disease hospitals. These facilities are exempt from payment of local property taxes. The PILOT payment is equal to 77% of the amount of taxes that would have been paid if the property were not exempt from taxation. The payment is made only on real estate and does not include payment for a tax loss on exempt personal property owned by these facilities. Payment is made once a year on or before September 30th 

The calculation of the full PILOT for towns and certain fire districts reflects 77% of their tax losses for the appropriate grand list. Exceptions to this calculation include the campuses of the Connecticut Healthcare Systems located in Newington and West Haven and owned by the United States Department of Veterans’ Affairs. Additionally, C.G.S. section 12-20b, section 12-19b, and section 12-18b as amended by P.A. 21-2, J.S.S. specify the following payments: $5,000,000 to Bridgeport for unspecified general PILOT support; $100,000 for the Connecticut Hospice in Branford; $1,000,000 for the United States Coast Guard Academy in New London; and $60,000 for the state-owned forest in Voluntown.

A grantee’s payment in any year may reflect a modification due to an audit of an amount previously paid. There is also a proportionate reduction of PILOT totals to the amount of the appropriation in any year in which funding is insufficient.  Notwithstanding the statutory formulas, town-by-town payment lists were established for both PILOT programs from FY 2016 through FY 2021.

 

Beginning in FY 2022, municipalities and districts will receive a percentage of their full PILOT calculations based on the qualifications established in P.A. 21-3. The new Tiered PILOT approach divides grantees into three separate tiers:

  • Tier 1:Municipalities with an Equalized Net Grand List Per Capita (ENGLPC) less than $100,000, Alliance Districts, and municipalities in which the State of Connecticut owns more than 50% of the property within the town’s boundaries.
  • Tier 2:Municipalities with an ENGLPC between $100,000 and $200,000.
  • Tier 3:Municipalities with an ENGLPC greater than $200,000.

Grants paid to districts are calculated using the tier of the municipality in which the district is located.

 

Tier 1 grantees receive 50% of the total PILOT formula calculations described above, Tier 2 grantees receive 40%, and Tier 3 grantees receive 30%. Additionally, every grantee must receive at least the same amount as the sum of State-Owned PILOT and College & Hospital PILOT grants that they received in FY 2021.

 

In S.A. 21-15, a total of $230.3 million is appropriated in FY 2022 and $243.9 million in FY 2023 to support PILOT grants. Pursuant to section 448(a)(2) of P.A. 21-2, J.S.S., the balance of Tiered PILOT grants payable after General Fund appropriations are exhausted will be funded by MRSA. Such additional Tiered PILOT funding from MRSA is anticipated to total $81.9 million in FY 2022 and $68.3 million in FY 2023.

 

Grantees receive PILOT payments on or before September 30.


Statutory References: Connecticut General Statutes (CGS): Sections 12-20a and 12-20b.

Regulatory References:  Regulations of Connecticut State Agencies: §12-20b-1 and §12-20b-2.

For further information, please contact:
Martin Heft: phone (860) 418-6355 - e-mail  - Martin.Heft@ct.gov.