My last story on the New London eminent domain evictions drew this reply from an official at Connecticut College (which was briefly named at the beginning of the story):
I just read your "Endgame In New London" article, and wanted to comment on your statement: "More than half the property in New London generates no tax revenue for the city because it's owned by several colleges (including Connecticut College, the Coast Guard Academy, and Mitchell College), by churches, hospitals, or by the city itself."
This is a popular misconception, as Connecticut is one of a handful of states that makes payments to towns for the revenue that would have otherwise come in from tax-exempt institutions—such as colleges, hospitals, etc. This is based on the recognition of the longstanding tradition that such institutions serve the public good by enhancing the education, health and general welfare of the state's citizens. Overall, the state of Connecticut reimbursed the city of New London $4.65 million in the fiscal year ending June 30, 2006 through the PILOT (payments in lieu of taxes) program.
As for Connecticut College, in FY06 the city received a total of $2.06 million of the $2.87 million from which the college is exempt. Basically, it is 71 percent of the taxes that the college would pay if it were a for-profit business.
For FY07, the reimbursement rate is set to be at 77 percent. So, I believe New London's total PILOT payment will increase to $5.2 million in FY07.
Let me know if I can provide you further information. Thanks.
Director of Media Relations
I understand the Nutmeg State's PILOT program is supposed to be the envy of the nation, but it doesn't change the basic situation that all that public, non-taxed real estate creates a burden on the city—it just means part of the burden is offloaded to the state. I don't know how this influences the incentive structure for state decision-makers. It might encourage economic development projects that could take some of the burden off the state. But it also might make the state less inclined to support projects like the New London Development Corporation's, because the aim of those projects is to raise property values, which would presumably increase the amount of PILOT funding the state has to pay.
There's also an argumentum ad corporatem in here somewhere: Former Connecticut College president Claire Guadiani served four years as head of the NLDC, and has written a whole book about using private property for the Greater Good. But I don't know that that history is influencing anybody's thinking at CC today. In any event, my point was that more than half of New London's real estate is not privately held and has to be fed on the public tit. Connecticut's PILOT program doesn't change that.