On the campaign trail, Governor-elect Ned Lamont floated a lofty promise that no gubernatorial contender who became governor has ever delivered, but if he shepherds his pledges–“I would fully fund PILOT and I would fully fund ECS,” they’ll represent well over $50 million extra to Bridgeport for reimbursement on payments in lieu of taxes (PILOT) and Education Cost Sharing (ECS) formula.
That would be a tasty proposition for Mayor Joe Ganim as he fashions an election-year budget.
Colleges, hospitals, government buildings and churches are not taxable to host communities. Bridgeport has numerous parcels whose values amount to more than one billion dollars that are non taxable, services desirable to the entire region. Every year it’s a budgeting battle for local bean counters. How much can we plug in from the state in PILOT dough that covers a fraction of what the city would receive if those properties were fully taxable?
Ganim, for one, sees PILOT reimbursement as an investment in cities with the convening of the General Assembly in January.
Ganim penned that narrative in the commentary below that also appears in the Connecticut Post.
What’s the greatest challenge holding back Connecticut businesses from hiring more employees? Many will tell you the most potent element to attract a new workforce is to have vibrant cities with strong cultural and commercial institutions and walkable city centers–attractive places to live, work and play.
Connecticut cities continue to be challenged pockets of need and dependency while affluent suburbs and their counterparts from the cities, each fight for a declining share of revenue from a fiscally challenged state.
Smaller communities need cities to thrive as economic development generators that create jobs held by people living in their regions. Healthy cities are beneficial for all surrounding communities and provide the necessary services we all rely on. These services and institutions include churches, courthouses, colleges and universities, hospitals, as well as state and federal government buildings–all of which do not pay taxes.
Connecticut has restricted the means of revenue collection for our municipal governments to almost exclusively the property tax. In Bridgeport almost half of the property is tax exempt.
The state is bound by statute to reimburse cities for lost property tax revenue through a program called PILOT (payment in lieu of taxes). Statutes on the books for decades committed the state to reimburse cities through PILOT payments for 45 percent of the revenue they lost from tax exempt property. Connecticut never lived up to this commitment.
PILOT reimbursements have been plummeting over the last 10 years. In 2011 the state reimbursed municipalities for 26 percent of lost revenue. That figure was only 14 percent in 2018.
In Bridgeport, we have $35 million of tax-exempt property. The state only reimburses our city for about $11 million annually, creating a gap of $24 million. This inequity compounds year after year. Cities attempt to make up for the difference by charging higher property taxes which puts the burden on our residents and is a deterrent for attracting and retaining new businesses.
We want our cities to be places of innovation and thriving economies where people want to live, and schools turn out the workforce of the future. The state and Governor-elect Ned Lamont have a chance to enact a new budget in 2019 that fully funds the state’s commitment to reimburse cities for PILOT.
This a tall order in our “land of steady habits.” Now can be the time for our state to make meaningful change. Property owners in Bridgeport are ready.
Trump’s 2017 tax law created 9,000 Opportunity Zones. Where’s the one in Bridgeport? https://www.bloomberg.com/news/features/2018-12-06/kushners-new-jersey-buying-spree-eligible-for-trump-tax-perks
Fund PILOT by disbanding the Bond Commission which is a
luxurytrait of a fiscally strong state. The current Bond Commission is acookie jarcontributor to our unhealthy condition. It systematically pushes the needle backwards!Instead of being dismissive of your repeated advice against the State of CT using bonding as a revenue raiser (primarily for long term needs), I will ask you to explain your position. I am understanding that you are against bonding as a technique of financing State purchased of stuff. If the life of stuff is 20 years or longer what is your reasoning for being so negative? Would you rather have taxes, as an alternative to funding pay for the stuff in the year of purchase? Looking for serious explanation, LE? Time will tell.
I’ll be brief. Taxes are not optional. Bond money is discretionary (cookie jar) and expensive. Bond money favors the few at the expense of the many. It claims local victory but produces statewide defeat.
As soon as the state enters a deficit zone, contracts and bonding should expire. That’s the check and balance that produces fiscal restraint and thus a balanced budget. Are you with me so far?
Connecticut needs retroactive oversight and not “strangulation by debt”.
Prescriptions for better governance? What’s a “deficit zone” by your definition? And how do you propose getting such recognized in State law so that borrowing is prohibited? And “retroactive oversight”, another phrase for the future? When our current legislative oversight fails in balancing budgets by cost cutting and rather raises taxes or floats future budgets with numbers that are not current nor seriously proposed (and are easy to achieve) but takes no joy when they arrive with surpluses that could have been used to assist priority goals, but then find they never had any priority goals? Where are all of us? Lost in a land where OPEN, ACCOUNTABLE, TRANSPARENT and HONEST financial reporting are not part of the deal. When will you hear Ganim2 admit that the taxpayer 29% increase in year one was our real estate value reduction coincidentally? And two years since with surplus budgets (and no serious cost cutting) poises us for? Time will tell.
Bonded money always means spending tomorrow’s earnings today. That’s a fiscal no-no. Unlike Uncle Sam, Connecticut doesn’t have a sovereign currency-something that puts us at a disadvantage our bond counsel has been unable to overcome.
Local Eyes absolutely is negative about government spending money that is not taxed by it, gifted to it, or is an asset to be sold (hopefully at a profit and probably not if it is at a loss.
Since having a position on government finance for most folks follows personal and self-employed business practices, let me ask in this final attempt:
**Have you always paid cash for everything you buy?
**Do you never use a credit card and let the amount outstanding roll over in some fashion paying interest on part of the amount?
**When you purchase a vehicle, always in cash or with zero interest rate plan?
**If you own land and building, did you secure a mortgage?
If you do none of these, then you are consistent, but you are very different than more than 90%of those who read you. The jump from your personal to our municipal governance is huge with hundreds of millions on the books and due to bondholders over the next 20-30 years. Plus interest. Time will tell.
JML, in 2018, we’re all risk managers, right? Dodging the bullets aimed our way means after repeated attempts my arrow must find its target.
Your questions seem aimed at the dirty laundry in some one else’s hamper. What’s with you?
It is simply fact (and expectable) that most suburbanites prefer ignorant bias against the cities to admitting that the suburbs owe their tax-bases and lifestyles to the cities — and owe the cities far more than they contribute to the cities in taxes for PILOTS or state funding to the city public schools, etc…
Mayor Ganim’s timid admonition to the state to allow Bridgeport to recoup some small portion of our support of the ‘burbs, per the payment by the state of the statutory PILOTS pittance for his city, while failing to make a “full” statement and argument on behalf of “his” city in this regard, falls far short of the mark.
Indeed; Mayor Ganim’s op-ed should have been along the lines of the inarguable indications for the creation of state statute to grant cities a calculated payment, defined as a percentage of the municipal revenue of each surrounding, suburban town, for the cost of city infrastructure/services utilized by that town, as well as for the value added to the tax-bases and overall quality of life of those surrounding suburbs by access to such infrastructure and services. (In this vein, by way of specific example; without Bridgeport and access to its infrastructure, services, and workforce, Trumbull would still be a hick-town without a real tax-base or its own schools…)
This op-ed “effort” by Mayor Ganim prompts this Bridgeporter to say: Sorry, Mr. Mayor, but after three years into your “second chance,” and several months with a gubernatorial-candidate “bully pulpit,” you have failed to show the kind of leadership and commitment to your city and its problems that your position demands… It’s time to stop just going through the motions… Move on to a position for which you are better suited and in which you are more comfortable — such as corporate urban-issues advisor for gambling-development interests… Or, perhaps, a similar type of position advising expansionist, pseudo-non-profit institutions, such as SHU…
Lamont wants to renovate the cities including Bridgeport. Ganim is looking for headlines and photo ops to boost his tarnished profile. The word “felon” just don’t wash off, Joe. It’s like a tattoo. Get used to it. Lamnont is going to work for the people of the city of Bridgeport, not your overblown ego.