State-Owned Property - Payment in Lieu of Taxes (State Owned PILOT) 

This program provides a payment in lieu of local property taxes (PILOT) for real property tax losses due to exemptions applicable to state-owned real property, certain real property that is the subject of a state lease or long-term financing contract, municipally-owned airports and certain land held in trust by the federal government. Payment is made only for real property and does not include payment for tax loss on exempt personal property owned by these facilities or property used for highway purposes. Payment is made once a year on or before September 30th. 

A property’s use and the amount of state-owned real property in a town have historically determined the percentage of property tax exemptions reimbursed by PILOT, which are:
  1. 100% for state prison facilities used for purposes of incarceration in the prior fiscal year, any portion of the John Dempsey Hospital used as a permanent medical ward for prisoners, property and facilities owned by the Connecticut Port Authority, land designated under the 1983 settlement boundary and taken into trust by the federal government for the Mashantucket Pequot Tribal Nation, and all state-owned property in a town in which the State of Connecticut owns more than 50% of the property within the town’s boundaries;
  2. 65% for the Connecticut Valley Hospital and Whiting Forensic Hospital; and
  3. 45% for all other state-owned real property, certain real property leased by the state as described in section 4b-39, municipally-owned airports and certain other real property owned or controlled by the federal government

A grantee’s payment in any year may reflect a modification due to an audit of an amount previously paid. Since FY 2015, the four towns of Windsor Locks, Suffield, East Granby and Windsor receive a total of $4,678,571.79 directly from the Connecticut Airport Authority, for the Bradley International Airport property, regardless of actual property tax loss. This payment is not part of the State-Owned PILOT payment.

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 12-19a, 12-19b and 12-19c.

Regulatory References: Regulations of Connecticut State Agencies: §12-19b-1 and §12-19b-2.

For Further Information, Please Contact: Martin Heft, (860) 418-6355, Martin.Heft@ct.gov