A bill that would require hospitals and private colleges to pay property taxes advanced through the state House of Representatives Thursday night.
The legislation, championed by House Speaker Brendan Sharkey (D-Hamden), aims to bolster local government revenues in communities with a high number of tax-exempt properties. It passed by a vote of 82-60.
The legislation puts student housing with 20 or fewer units owned by private nonprofit colleges and universities back on the tax rolls. And it would allow municipalities to levy taxes beginning in fiscal year 2017 on property purchased by medical foundations or health systems after Oct. 1, 2015 — so long as the property was already on the tax rolls before the purchase.
If the bill makes it through the Senate and Gov. Dannel P. Malloy signs it, towns with a lot of student housing could see a significant revenue gain, such as Hamden, which has Quinnipiac University.
But the Office of Fiscal Analysis said it’s unclear how much residential property is owned by private universities. Those schools would have paid an estimated $175 million in property taxes last year, if all of their property was taxed, according to OFA.
The bill would also reduce in fiscal year 2018 payment-in-lieu-of-taxes (PILOT) payments to cities and town with affected college property.
Numerous schools and hospitals testified against the bill in March, arguing that it would place an undue financial burden on two industries that provide important services and jobs.
But in a statement released Friday, Sharkey was not swayed.
“These are not your typical small, struggling non-profits – these colleges and hospitals are very large entities, nearly indistinguishable from traditional private sector businesses, except they don’t pay taxes,” Sharkey said. “They put a strain on municipal services such as police, fire, and public works, but it’s the host town’s families and businesses that must pick up the tab in the form of higher property taxes.”
